The Market for Financial Advisers

Turner, John A.; Muir, Dana M.

doi:10.1093/acprof:oso/9780199683772.003.0002

Cited by 12 publications

(12 citation statements)

References 10 publications

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“…According to Turner and Muir (2013), the cost of a one-hour financial advice consultation averages about $250. Veritat.com offers financial planning at $25 a month for singles and $40 for families ($35 for retirees), after an initial meeting fee of $250.…”

Section: Calibrationmentioning

confidence: 99%

Optimal Financial Knowledge and Wealth Inequality

Lusardi

Michaud

Mitchell³

2017

Journal of Political Economy

518

172

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We show that financial knowledge is a key determinant of wealth inequality in a stochastic lifecycle model with endogenous financial knowledge accumulation, where financial knowledge enables individuals to better allocate lifetime resources in a world of uncertainty and imperfect insurance. Moreover, because of how the U.S. social insurance system works, better-educated individuals have most to gain from investing in financial knowledge. Our parsimonious specification generates substantial wealth inequality relative to a one-asset saving model and one where returns on wealth depend on portfolio composition alone. We estimate that 30–40 percent of retirement wealth inequality is accounted for by financial knowledge.

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Section: Calibrationmentioning

confidence: 99%

Optimal Financial Knowledge and Wealth Inequality

Lusardi

Michaud

Mitchell³

2017

Journal of Political Economy

518

172

View full text Add to dashboard Cite

show abstract

“…By 2010, there were 292 million shareholder accounts and 7,581 mutual funds (ICI, 2011). 1 Given the information and choice burdens of managing one's financial affairs, it is not surprising that roughly one-third of households report consulting a professional financial planner to help with saving, investments, and insurance (SunAmerica Financial Group, 2011;Twigg, 2011;Turner and Muir, 2013). But the challenges for consumers do not end here, because there are many different types of financial planners and a growing variety of titles, credentials, and certifications.…”

Section: Contentsmentioning

confidence: 99%

Evaluating the Impact of Financial Planners

Zick¹,

Mayer²

2013

The Market for Retirement Financial Advice

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The growing complexity of investment decision-making has increased the potential value of advice from a financial professional. Past research provides only a very partial answer to the question of whether professional financial advice leads to better investment practices and results. In this chapter, we review findings in the existing research literature, detail 'best practice' research approaches for drawing confident conclusions regarding causal influences, and provide an example of such an approach using data from the 2007 Survey of Consumer Finances. Our results suggest that the benefits of financial advice may be overstated in the absence of methodological rigor.

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“…By contrast, funds in Individual Retirement Accounts (IRAs) or DC plans other than money purchase plans are generally not annuitized (Rappaport, 2011). As shown by Turner and Muir (2013), the time of rollover is one of several situations when 401(k) plans are vulnerable with regard to potential conflicts of interest. There is also no requirement to provide employees or retirees with information on payout strategies or options beyond what is provided by the plan, and there is also no requirement to provide information about the possibility of lifetime income while plan assets are being accumulated.…”

Section: Setting the Stagementioning

confidence: 99%

The Role of Guidance in the Annuity Decision-Making Process

Hueler¹,

Rappaport²

2013

The Market for Retirement Financial Advice

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This paper focuses on structural and active guidance in the process of buying annuities. We explore the role of employers and service partners, and we review experience with a purchasing platform offering structural and active guidance in purchasing annuities. The analysis draws heavily on data from Hueler Companies, a firm that provides individuals access to lifetime income annuities through an on-line institutional delivery platform implemented in non-exclusive partnerships with financial services firms, defined contribution plan sponsors, plan administrators, not-for-profit associations, and financial advisors.

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The Market for Financial Advisers

Cited by 12 publications

References 10 publications

Optimal Financial Knowledge and Wealth Inequality

Optimal Financial Knowledge and Wealth Inequality

Evaluating the Impact of Financial Planners

The Role of Guidance in the Annuity Decision-Making Process

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