Financial Services Review最新文献

Identity theft is a growing problem in the American economy. While there have been attempts to address and minimize the problem, those attempts have focused on making identity theft a crime. This paper discusses the inadequacy of this approach from the perspective of individual victims of identity theft, and the fact that the law currently provides those victims little recourse or remedy for the harms they suffer. It also offers a proposal for legislation that would provide some remedy as well as an incentive to protect consumer identity information.

Australian retirement savings funds are growing rapidly and fund members are assuming greater responsibility for their own savings. Individuals’ retirement savings decision processes have not been extensively researched, however, these decisions are significant not only for members but also for employers and government. This paper provides information on retirement savings in Australia and reports on a survey of members of a University superannuation fund who were recently asked to choose between a defined benefit scheme or one of four investment accumulation accounts. We explore gender differences in knowledge of superannuation and those consulted in making the decision.

The paper highlights the difficulties in adopting investment strategies designed to exploit book-to-market and size effects on the New Zealand share market, which is small and illiquid by world standards. The small number of suitable companies listed on the market, and the high return volatility of individual equities make it difficult to reliably achieve superior returns. Excess returns due to size and book-to-market are highly volatile on a period-by-period basis due to the high volatility of individual shares combined with small portfolio size, which limits diversification.

The CFP™ Certification Examination¹, unlike many other professional examinations, is scored using a system that reports scores on a pass–fail basis but does not provide specific numerical scores. This grading system, known as the modified Angoff process, establishes a passing score for each examination and then incorporates adjusting factors to reconcile actual and expected testing results. The CFP Board also factors in an additional scoring adjusting to equate test scores for consistency over time. The purpose of this paper is to explain the methodology of the modified Angoff process and, in particular, how it relates to the Certified Financial Planner Board of Standards Certification Examination.

Choosing among various tax preferred investment vehicles for retirement planning requires individuals or financial planners to make assumptions about how potential tax savings are to be invested. This paper extends the work of previous studies that assume tax savings are invested in vehicles that are either tax-deferred or taxed each year as ordinary income. We assume tax savings are invested in a typical taxable mutual fund that contains implicit tax-deferral characteristics and find that the results are sensitive to these assumptions. We also extend the analysis to examine employer-sponsored 401(k) plans that match some or all of an employee’s contributions and find that only modest employer contributions are necessary for 401(k)s to dominate Roth IRAs.

Individuals increasingly rely on web-based sources for financial advice. But does the advice you get depend on the site you visit? Relying on standardized input data from three different family scenarios, we observe that the variation in advice across web-sites increases with client input complexity. Web advice dispersion also differs in magnitude across financial planning domains such as insurance, investments, retirement, income tax, and estate tax. ‘Live advisor’ financial solutions, however, are not always more consistent than those available on the web. Human advice varies less with client complexity, but in certain planning domains web advice has lower dispersion. The results suggest that client characteristics and planning domains matter in the development of efficient distribution mechanisms for financial advice.

Mutual funds and variable annuities are similar instruments that differ mainly in their tax treatment. Their relative appeal is the subject of intense debate in the industry. This paper contributes to the literature by quantifying the impact of investment return uncertainty when comparing the two. We focus on the embedded tax options using Monte-Carlo simulations. We conclude that although low-cost variable annuities are superior to low-cost mutual funds over long time horizons, the critical threshold is at least 10 years for typical levels of risk aversion. If, however, one ignores the tax options, the erroneous break-even horizon drops to 5 years.

The purpose of this study is to provide an initial examination of the first three waves of the HRS in terms of non-housing net worth by gender, education, race, religion, income, and age. The longitudinal data that is available for a sample of those who are nearing retirement or in retirement allows a picture of their financial condition to be drawn. Statistical analysis indicates that there is a difference in non-housing net worth by demographic characteristics and marital status for each wave of the HRS and between the waves.

Earlier studies of U.S. closed-end investment companies (CEICs) examined whether the discount between CEIC price and net asset value could be exploited to gain excess returns. We advance these studies by investigating many more trading strategies and various transaction costs. We find that the role of the span between buy and sell trigger points is highly significant in determining returns, and that transaction costs impact returns and mitigate the influence of the trigger point span. Moreover, the 10 most successful strategies for each transaction cost level exhibit lower coefficients of variation than does the Standard & Poor’s 500 (S&P 500) index.