FINANCIAL PLANNING REVIEW最新文献

It is increasingly common for universities to offer financial education or life skills courses as electives. However, less is known about the potential impacts of these courses on factors beyond financial literacy, such as financial attitudes, financial stress, or financial well-being. Our study explores these topics using a unique sample of 370 undergraduate students, half of whom opted to enroll in and complete a financial life skills course and half of whom did not. We explore various aspects of student financial life, including well-being, stress, self-efficacy, knowledge, behavior, and socialization. Evidence from our study did not suggest that a single-credit financial life skills course has much impact on financial well-being or financial stress. There were notable impacts associated with financial socialization and financial self-efficacy that reinforce some earlier explorations of financial well-being.

Low household wealth has been associated with the lack of participation in risky financial markets. To improve our understanding of how households decide to participate in financial markets, it is important to investigate how financial literacy heterogeneity among heads influences households' risk attitude and capacity and the propensity to invest in various financial markets. Utilizing the U.S. 2016 survey of consumer finances, this article tests the effect of the head's financial literacy on the household's risk attitude and capacity and also examines whether the household's risk tolerance leads to a greater impact of the head's financial literacy on the likelihood of investing in high-yielding markets. Our key finding is that the head's financial literacy improves the household's risk tolerance, thereby nudging the household to invest in high-yielding markets. The article identifies improving the head's financial literacy as an efficacious strategy for increasing household wealth via greater participation in higher-yielding financial markets.

Financial advisors use questionnaires and discussions with clients to determine investment goals, elicit risk preference and tolerance and establish a suitable portfolio allocation for different risk categories. Financial institutions assign risk ratings to their financial products. Advisors use these ratings to categorize products into the same risk categories used for portfolio allocation. Subsequently, clients select a portfolio of assets whose risk profile we call revealed risk. This paper proposes a novel methodology for comparing an individual's elicited and revealed risk. We propose using Value-at-Risk to measure elicited and revealed risk and the discrepancy between them, showing whether clients are over-risked or under-risked. We demonstrate the methodology using a dataset from a Canadian private financial dealer. We find that elicited risk is consistently higher than revealed risk–advisors build a safety buffer into their recommendations–and elicited risk varies with respect to demographic features and trading behaviors in expected ways–investors are receiving sound advice. This risk discrepancy could be used, for example, to gauge the quality of financial advice an individual is receiving, or it could be used to help advisors communicate inconsistencies between client trading actions and client goals. Our methodology falls into the interest realms of advisors, regulators, and dealerships.

Employers control two primary levers that can motivate retirement savings among defined contribution plan participants—default savings rates and match rates. Setting a higher default savings rate can increase plan contributions among passive savers who accept the default. A higher match rate incentivizes active savers to increase contributions. This study uses a large sample of defined contribution participants to estimate the interaction between employer match and default rates on savings outcomes among new participants. Selecting a higher default rate has the largest impact on employee savings rates. Plans with low default savings rates that match a high percentage of employee earnings induce higher-income participants to actively move away from the low default savings rate, resulting in a wider savings gap between higher- and lower-income employees. When employees are defaulted in at a higher rate, fewer move away from the default savings rate and the default investment choice (e.g., a target-date fund). A higher default savings rate results in higher and more equal savings rates among employees, and higher acceptance of professionally managed defaults investments.