There's a phrase no one wants to read in a sweeping report about the financial advisors who handle their savings: economy-wide misconduct.

A new working paper by business school professors at the University of Chicago and University of Minnesota found that 7 percent of financial advisors have been disciplined for misconduct that ranges from putting clients in unsuitable investments to trading on client accounts without permission. That's a troubling mark for an industry that relies on the trust of clients. And some large, well-regarded firms have misconduct records that far exceed the average. Nearly 20 percent of financial advisors at Oppenheimer & Co., with more than 2,000 advisors counted in the study, have misconduct records, according to the new paper.

"It's everywhere, not just small firms. It is pervasive," said Amit Seru, a finance professor at the University of Chicago's Booth School of Business and a co-author of "The Market for Financial Adviser Misconduct."

Seru considers the study to be conservative in measuring misconduct. The paper homed in on just six of 23 categories of disclosure in the BrokerCheck database considered "indicative of advisor misconduct." The database is overseen by the Financial Industry Regulatory Authority, or FINRA, the industry's self-regulatory organization. The study counted as misconduct disclosures about an "investment-related arbitration or civil suit ... that resulted in an arbitration or civil judgment for the customer," as well as formal proceedings by regulators "for a violation of investment-related rules," among other alleged infractions.

A spokeswoman for Oppenheimer, Jacqui Emerson, said in a statement that the company "has made significant investments to proactively tackle risk and compliance issues in our private client division. We've made changes in senior leadership, branch managers, and significant changes in our advisor ranks." Those reforms include the appointment of a new global compliance officer and efforts to improve surveillance.

Misconduct isn't left unchecked by financial firms. About half of advisors found to have committed misconduct are fired—although 44 percent of advisors who leave a job due to misconduct are hired by another firm within a year, according to the paper. Many fired advisors end up moving to firms that have higher rates of misconduct than their previous employer did, and they become repeat offenders. "Prior offenders are five times as likely to engage in new misconduct as the average financial advisor," the study found.

"This is eye-opening and suggests not only that some firms have a high tolerance for misconduct on the part of their employees, but that their very business model is to attract the broker who can generate high revenue at the cost of repetitive disciplinary violations," said John Coffee, a professor at Columbia Law School in New York. "FINRA needs to focus on this.

"The first-of-its-kind study names names, listing 10 advisory firms with the highest misconduct rates, as well as those with the lowest.

Representatives from firms listed among those with the highest rates of misconduct either declined to discuss the report on the record or did not respond to requests.