Pub Date : 2023-01-31DOI: 10.3905/jwm.2023.25.4.001
Jean L. P. Brunel, Paul Bouchey
{"title":"Editor’s Letter","authors":"Jean L. P. Brunel, Paul Bouchey","doi":"10.3905/jwm.2023.25.4.001","DOIUrl":"https://doi.org/10.3905/jwm.2023.25.4.001","url":null,"abstract":"","PeriodicalId":39998,"journal":{"name":"Journal of Wealth Management","volume":"25 1","pages":"1 - 3"},"PeriodicalIF":0.0,"publicationDate":"2023-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47175172","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"BOOK REVIEW: Goals-Based Portfolio Theory by Franklin Parker","authors":"Paul Bouchey","doi":"10.3905/jwm.2023.1.197","DOIUrl":"https://doi.org/10.3905/jwm.2023.1.197","url":null,"abstract":"","PeriodicalId":39998,"journal":{"name":"Journal of Wealth Management","volume":"25 1","pages":"127"},"PeriodicalIF":0.0,"publicationDate":"2023-01-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42804008","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Tania Driver, Mark A. Brimble, B. Freudenberg, K. Hunt
There is a growing personal responsibility for individuals to ensure their financial security, which can include the ability to cope with the uncertainty that can arise. Insurance can play an important role in allowing people to manage this uncertainty, including personal insurance such as life insurance, total and permanent disability, income protection, and trauma cover. Our understanding of personal insurance is particularly limited. This article reports a study into Australians’ confidence as it relates to personal insurance, and whether they consider their coverage is adequate. This understanding is important as confidence could influence the decision to purchase insurance.
{"title":"Australians’ Confidence about Personal Insurance","authors":"Tania Driver, Mark A. Brimble, B. Freudenberg, K. Hunt","doi":"10.3905/jwm.2023.1.198","DOIUrl":"https://doi.org/10.3905/jwm.2023.1.198","url":null,"abstract":"There is a growing personal responsibility for individuals to ensure their financial security, which can include the ability to cope with the uncertainty that can arise. Insurance can play an important role in allowing people to manage this uncertainty, including personal insurance such as life insurance, total and permanent disability, income protection, and trauma cover. Our understanding of personal insurance is particularly limited. This article reports a study into Australians’ confidence as it relates to personal insurance, and whether they consider their coverage is adequate. This understanding is important as confidence could influence the decision to purchase insurance.","PeriodicalId":39998,"journal":{"name":"Journal of Wealth Management","volume":"25 1","pages":"71 - 91"},"PeriodicalIF":0.0,"publicationDate":"2023-01-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45047502","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We extract proxies for trader conscientiousness from plain text to explain the cross-section of individual and institutional trader performance. The literature claims conscientiousness to be a main determinant of workplace performance. We employ measures like text length, error frequency, sentence simplicity, and lexical diversity to construct a conscientiousness index. Our findings suggest that more conscientious traders outperform their peers on a risk-adjusted basis. This implies that personality affects investment decisions. Our data stems from a web-based platform that gives individuals the opportunity to set up small investment funds other users can invest in.
{"title":"Conscientiousness and Performance: The Influence of Personality on Investment Decisions","authors":"Tobias Lauter, Marcel Prokopczuk, S. Trück","doi":"10.3905/jwm.2023.1.199","DOIUrl":"https://doi.org/10.3905/jwm.2023.1.199","url":null,"abstract":"We extract proxies for trader conscientiousness from plain text to explain the cross-section of individual and institutional trader performance. The literature claims conscientiousness to be a main determinant of workplace performance. We employ measures like text length, error frequency, sentence simplicity, and lexical diversity to construct a conscientiousness index. Our findings suggest that more conscientious traders outperform their peers on a risk-adjusted basis. This implies that personality affects investment decisions. Our data stems from a web-based platform that gives individuals the opportunity to set up small investment funds other users can invest in.","PeriodicalId":39998,"journal":{"name":"Journal of Wealth Management","volume":"25 1","pages":"17 - 44"},"PeriodicalIF":0.0,"publicationDate":"2023-01-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47101601","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Two Excel-based templates are developed to help determine when it is optimal for starting to receive monthly social security benefits. The decision information accounts for uncertain life expectancy by implementing a rate of return that should be set, at a minimum, to the individual’s expected return on investments or based on a metric provided in the article that considers potential life expectancy.
{"title":"Social Security Decisions: Should Recipients Opt for Early Payments?","authors":"Tom Arnold, J. Earl, Terry D. Nixon","doi":"10.3905/jwm.2023.1.196","DOIUrl":"https://doi.org/10.3905/jwm.2023.1.196","url":null,"abstract":"Two Excel-based templates are developed to help determine when it is optimal for starting to receive monthly social security benefits. The decision information accounts for uncertain life expectancy by implementing a rate of return that should be set, at a minimum, to the individual’s expected return on investments or based on a metric provided in the article that considers potential life expectancy.","PeriodicalId":39998,"journal":{"name":"Journal of Wealth Management","volume":"25 1","pages":"8 - 16"},"PeriodicalIF":0.0,"publicationDate":"2023-01-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48681738","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Caroline De Oliveira Orth, Clea Beatriz Macagnan, Rodrigo Machado Rossetto
This article discusses the Family Office (FO) theme and describes how this organization promotes financial education for future heirs of Brazilian business families. FO is an organization formed by business families to manage and preserve their respective assets. Financial education is related to technical knowledge aimed at managing financial resources. This knowledge should concern the business family that aims to maintain its resources. The research was developed through semi-structured interviews using the thematic analysis technique. The sample includes a total of 19 people interviewed, linked to 10 FOs to whom they had convenient access. The research result identified two types of FO organizations: Single Family Offices (SFO) and Multi-Family Offices (MFO). Seven of the nine SFOs have programs for the financial education of heirs. Two of the five MFOs offer specialized financial education consultancies to their clients. The others manage financial resources. As a result, MFOs have more limited participation in the financial education of heirs. In contrast, SFOs, with more than 10 members, promote financial education, especially by hiring specialized consultants and offering targeted courses, that is, through training and development. The interviewees also emphasized that the knowledge they consider important to be developed for heirs is basic finance, balance sheet analysis, investment management, and family governance. In addition, the first generation of the business family usually has low schooling, while the second generation can already be considered highly educated. This characteristic may have contributed to education being one of the values preserved through the FO.
{"title":"Family Office as a Financial Education Mechanism in Brazil","authors":"Caroline De Oliveira Orth, Clea Beatriz Macagnan, Rodrigo Machado Rossetto","doi":"10.3905/jwm.2023.1.195","DOIUrl":"https://doi.org/10.3905/jwm.2023.1.195","url":null,"abstract":"This article discusses the Family Office (FO) theme and describes how this organization promotes financial education for future heirs of Brazilian business families. FO is an organization formed by business families to manage and preserve their respective assets. Financial education is related to technical knowledge aimed at managing financial resources. This knowledge should concern the business family that aims to maintain its resources. The research was developed through semi-structured interviews using the thematic analysis technique. The sample includes a total of 19 people interviewed, linked to 10 FOs to whom they had convenient access. The research result identified two types of FO organizations: Single Family Offices (SFO) and Multi-Family Offices (MFO). Seven of the nine SFOs have programs for the financial education of heirs. Two of the five MFOs offer specialized financial education consultancies to their clients. The others manage financial resources. As a result, MFOs have more limited participation in the financial education of heirs. In contrast, SFOs, with more than 10 members, promote financial education, especially by hiring specialized consultants and offering targeted courses, that is, through training and development. The interviewees also emphasized that the knowledge they consider important to be developed for heirs is basic finance, balance sheet analysis, investment management, and family governance. In addition, the first generation of the business family usually has low schooling, while the second generation can already be considered highly educated. This characteristic may have contributed to education being one of the values preserved through the FO.","PeriodicalId":39998,"journal":{"name":"Journal of Wealth Management","volume":"25 1","pages":"93 - 116"},"PeriodicalIF":0.0,"publicationDate":"2023-01-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46443148","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article investigates the impact of financial literacy on stock market participation in India. It uses a sample of 700 respondents from three Indian states. The probit regression model has been used to estimate the effect of financial literacy on stock market participation. We find that most respondents lack fundamental understanding of finances. Less literate people are less likely to buy equities. Financial literacy has a big impact on stock market participation in India. Additionally, demographic parameters including age, education, income, marital status, and gender are proven to have an impact on financial literacy and stock market involvement. This article adds to the body of recent literature by providing a microeconomic explanation for the stock market participation paradox.
{"title":"Does Financial Literacy Affect Stock Market Participation? Evidence from India","authors":"Smita Tripathi","doi":"10.3905/jwm.2023.1.194","DOIUrl":"https://doi.org/10.3905/jwm.2023.1.194","url":null,"abstract":"This article investigates the impact of financial literacy on stock market participation in India. It uses a sample of 700 respondents from three Indian states. The probit regression model has been used to estimate the effect of financial literacy on stock market participation. We find that most respondents lack fundamental understanding of finances. Less literate people are less likely to buy equities. Financial literacy has a big impact on stock market participation in India. Additionally, demographic parameters including age, education, income, marital status, and gender are proven to have an impact on financial literacy and stock market involvement. This article adds to the body of recent literature by providing a microeconomic explanation for the stock market participation paradox.","PeriodicalId":39998,"journal":{"name":"Journal of Wealth Management","volume":"25 1","pages":"61 - 70"},"PeriodicalIF":0.0,"publicationDate":"2023-01-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43742443","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Owing to their personal success, affluent individuals are often asked to serve as nonprofit board members to help guide endowment investment policies. The coming wealth transfer, combined with a low-yield financial environment, adds importance to endowment financial management. Standard financial management favors a 60/40 allocation between equities and bonds. Warren Buffett, however, rejected this standard financial advice and directed the trustees of his estate to invest in a 90/10 allocation; 90% invested in the S&P 500 Index and 10% in short-term bonds. This article tests this strategy against various allocation methods for nonprofit endowments using a 5% payout. The heavier stock-weighted portfolios provide a higher likelihood an endowment balance will stay above the nominal initial balance and the inflation-adjusted balance, leading to more certainty the endowment can be relied on for operational expenses. The tipping point appears to be the 80/20 allocation. Allocations with more than 20% bonds perform noticeably worse and allocations with less than 20% bonds perform marginally better.
{"title":"Warren Buffett’s Advice … Good for Nonprofit Endowments?","authors":"C. Evans, Gregory R. Evans, M. A. Quijada","doi":"10.3905/jwm.2023.1.193","DOIUrl":"https://doi.org/10.3905/jwm.2023.1.193","url":null,"abstract":"Owing to their personal success, affluent individuals are often asked to serve as nonprofit board members to help guide endowment investment policies. The coming wealth transfer, combined with a low-yield financial environment, adds importance to endowment financial management. Standard financial management favors a 60/40 allocation between equities and bonds. Warren Buffett, however, rejected this standard financial advice and directed the trustees of his estate to invest in a 90/10 allocation; 90% invested in the S&P 500 Index and 10% in short-term bonds. This article tests this strategy against various allocation methods for nonprofit endowments using a 5% payout. The heavier stock-weighted portfolios provide a higher likelihood an endowment balance will stay above the nominal initial balance and the inflation-adjusted balance, leading to more certainty the endowment can be relied on for operational expenses. The tipping point appears to be the 80/20 allocation. Allocations with more than 20% bonds perform noticeably worse and allocations with less than 20% bonds perform marginally better.","PeriodicalId":39998,"journal":{"name":"Journal of Wealth Management","volume":"25 1","pages":"117 - 126"},"PeriodicalIF":0.0,"publicationDate":"2023-01-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47788022","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Financial literacy has been recognized as a vital pre-requisite for financial inclusion, especially in emerging economies like India. The present research contributes to this growing domain of research by examining the effect of financial literacy on inclusion. Considering the enormous growth of the finance industry in terms of products and services as well as operations, it is hard to confine financial inclusion to bank-based services only. Therefore, this article adopts a comprehensive measure to gauge financial inclusion by integrating banking services, investment products, and government schemes. In addition, a financial literacy score has been computed using objective-based questions focusing on varied financial aspects. Apart from financial literacy, the current study also assesses the moderating effect of gender on the relation between financial literacy and inclusion. Based on regression output, the findings convey a significant positive effect of financial literacy on all measures of inclusion. However, the moderation effect of gender lacks statistical significance. Present research findings have important implications for policymakers and industries; as an example service providers can use financial literacy development strategies to expand market share with long-term perspectives.
{"title":"Financial Literacy and Its Impact on Financial Inclusion: Moderating Role of Gender","authors":"Rajeshri Desai, Kedar Bhatt, Avani Raval","doi":"10.3905/jwm.2023.1.192","DOIUrl":"https://doi.org/10.3905/jwm.2023.1.192","url":null,"abstract":"Financial literacy has been recognized as a vital pre-requisite for financial inclusion, especially in emerging economies like India. The present research contributes to this growing domain of research by examining the effect of financial literacy on inclusion. Considering the enormous growth of the finance industry in terms of products and services as well as operations, it is hard to confine financial inclusion to bank-based services only. Therefore, this article adopts a comprehensive measure to gauge financial inclusion by integrating banking services, investment products, and government schemes. In addition, a financial literacy score has been computed using objective-based questions focusing on varied financial aspects. Apart from financial literacy, the current study also assesses the moderating effect of gender on the relation between financial literacy and inclusion. Based on regression output, the findings convey a significant positive effect of financial literacy on all measures of inclusion. However, the moderation effect of gender lacks statistical significance. Present research findings have important implications for policymakers and industries; as an example service providers can use financial literacy development strategies to expand market share with long-term perspectives.","PeriodicalId":39998,"journal":{"name":"Journal of Wealth Management","volume":"25 1","pages":"45 - 60"},"PeriodicalIF":0.0,"publicationDate":"2023-01-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44317968","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-10-31DOI: 10.3905/jwm.2022.25.3.001
Jean L. P. Brunel, Paul Bouchey
{"title":"Editor’s Letter","authors":"Jean L. P. Brunel, Paul Bouchey","doi":"10.3905/jwm.2022.25.3.001","DOIUrl":"https://doi.org/10.3905/jwm.2022.25.3.001","url":null,"abstract":"","PeriodicalId":39998,"journal":{"name":"Journal of Wealth Management","volume":" ","pages":"1 - 3"},"PeriodicalIF":0.0,"publicationDate":"2022-10-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45815651","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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