FINANCIAL PLANNING REVIEW最新文献

Past literature has explored the characteristics of individuals who use high-interest and tax-inefficient consumer debt products, such as carrying a monthly credit card balance and engaging with alternative financial services. That literature revealed that users of these debt products tended to be financially constrained households faced with an immediate liquidity need, and that they had lower levels of financial literacy. Much less is known, however, about the role financial literacy may play when a more advantageous solution may be available but not used—an example of which is securities-based loans, which offer lower rates and potential tax preferences. Therefore, this study used the 2018 National Financial Capability Study to examine why investors use traditional debt products when they could likely have qualified for a securities-based loan. Using bounded rationality as a theoretical framework, this research advances the literature in consumer debt and borrowing decisions. The results found that objective knowledge, as opposed to self-assessed ability or confidence, explained the use of optimal debt products. Additionally, advisor engagement was positively associated with securities-based loan use.

This study provides compelling evidence for Black underrepresenation in the financial advisor industry. Using a dataset of all U.S. securities-licensed individuals (N = 642,543), we first estimate the racial and ethnic composition of the industry using an algorithm that accounts for name, gender, and location. Second, we use a dataset enhanced by a commercial vendor to restrict the analysis to only those identified as working as financial advisors (n = 237,435). Using Google search volume for a racial epithet as a proxy for area racism, we find that greater racism in a market is associated with greater Black advisor underrepresentation. Overall, we estimate at the individual level that 10.1% of financial advisors are Black (relative to 13.4% of the U.S. population). Furthermore, our results suggest market-level racial animosity toward Blacks is negatively associated with Black advisor representation. We estimate a difference of 0.9 percentage points when comparing markets with the highest and lowest levels of animosity. For the average market with an estimated 11.4% Black advisor representation, an increase of 0.9 percentage points would represent a 7.9% increase in Black advisor representation.

Retirement plan sponsors, financial advisors, and public policy makers are increasingly interested in encouraging higher levels of retirement savings. This study enhances understanding of the behavioral biases that may adversely impact retirement savings decisions and financial outcomes and suggests mechanisms for improving outcomes. In an incentivized laboratory experiment, we study participants' investment and asset allocation decisions over a meaningful time horizon and test the efficacy of alternative behavioral prompts to motivate investment decisions. We find that greater financial literacy, higher levels of risk tolerance, and lower discount rates significantly increase levels of investment and expected return. Controlling for these factors, we find that behavioral prompts encouraging reflection on goals or on future needs have significant effects on allocation decisions and expected returns for young adults. We also find that the prompts increase expected returns for women and individuals with lower levels of financial literacy. These results suggest that behavioral prompts can be an effective method of improving retirement saving decisions, particularly for the less financially-literate.

To what extent do personality traits predict wealth in adulthood over and above standard demographic factors? In all 3240 adults in the UK completed a Big Five personality test and reported on their property wealth, savings and investments, and their physical valuable items. We also had data on their age, education, household income and gender. Correlations and regressions showed that the demographics, particularly age and income were, as expected clearest correlates of wealth. Conscientious was positively and agreeableness, neuroticism and extraversion were negatively associated with savings and investments. The data pointed clearly to conscientiousness as the most important personality trait in wealth accumulation. Implications of these results as well as limitations of the study are discussed.

This article analyzes Americans' perceptions of being debt-constrained. We focus on which population subgroups reported feeling most debt-constrained, how this perception was impacted by the COVID-19 pandemic, and how it relates to financial literacy and retirement readiness. To this end, we analyze two datasets, namely the 2020 and 2021 TIAA Institute-GFLEC Personal Finance Index files (P-Fin Index). The evidence shows that, prior to and during the pandemic, one in three American adults felt constrained by their debt. The percentage was even higher among vulnerable subgroups such as Black and Hispanic individuals, those lacking a bachelor's degree, those with lower incomes, and those with low levels of financial literacy. Being debt-constrained also has long-term financial consequences, as it is negatively linked to planning and saving for retirement. Finally, we show that financial literacy has a strong connection to both debt and retirement money management, confirming that financial knowledge is essential if people are to be able to manage their debt and build financial well-being.