Use of Financial Planners and Portfolio Performance

Lei, Shan; Yao, Rui

doi:10.1891/1052-3073.27.1.92

Cited by 14 publications

(11 citation statements)

References 74 publications

(56 reference statements)

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“…Demographic factors, such as gender, race/ethnicity, education and employment status, have shown a consistent trend in their association with stock ownership (Barasinska and Sch€ afer, 2018;Joshi and Bayra, 2017;Shin et al, 2020;Sivaramakrishnan et al, 2017). Other investors' personal characteristics, such as expected income certainty and expected investment time horizon, also played a role in their decisions to invest in stocks (Lei, 2019;Lei and Yao, 2016;Rieger et al, 2021;Shin and Kim, 2018).…”

Section: Variablesmentioning

confidence: 96%

Use of social networks in stock investment

Lei

Salazar

2021

IJBM

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PurposeDrawing on the literature regarding the social network and stock investment, this paper aims to focus on the use of the social network on stock ownership decisions at individual levels. This paper also attempts to shed light on potential mediators of the relationship between the social network and stock ownership.Design/methodology/approachTo determine the relationship between stock ownership and using the social network, logistic regression was used. In order to isolate the effect of using hs on stock ownership, a decomposing method was adopted.FindingsThe findings provide evidence of the positive contribution of the use of social networks in stock ownership. Personal characteristics, such as household net worth, homeownership, education level and risk tolerance, may play a vital role in influencing individuals' decisions regarding stock investment. In addition, this study contributes to our understanding of income's mediating role in stock investment decisions.Originality/valueFirst, the authors contribute theoretically by drawing from the assumptions of social networking contagion theory, social influence theory, and social capital theory. Second, we explored potential mediators of the relationship between the social network and stock ownership. Third, this study complements the literature in incorporating the social network in business, financial professionals to be exact.

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Section: Variablesmentioning

confidence: 96%

Use of social networks in stock investment

Lei

Salazar

2021

IJBM

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Section: Literature Reviewmentioning

confidence: 99%

“…Recent studies have started to investigate the value of financial advice from financial professionals. Lei and Yao (2016) found that American households who used financial planners had better performance in their investment portfolios. Similarly, Shin et al (2020) found that people who worked with financial planners to manage their financial assets had more diversified investment portfolios than did those who did not work with financial planners.…”

Section: The Importance Of Financial Advicementioning

confidence: 99%

Surviving in financial advice deserts: limited access to financial advice and retirement planning behavior

Chatterjee

Fan

2022

IJBM

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PurposeThis study introduces the concept of financial advice deserts (FADs), including financial advice received from personal financial advisors (PFAs) and Certified Financial Planners™ (CFP professionals) and investigates the association between living in these FAD states and the retirement planning activities of individuals.Design/methodology/approachThis study uses merged data gathered from multiple sources including (1) available state-level information on CFP professionals from the CFP board website, (2) state-level information on PFAs from the US Bureau of Labor Statistics and (3) individual levels of retirement planning behavior and other personal characteristics from the 2018 FINRA National Financial Capability Study. Using web data extraction tools and logistic regression analyses, this study examines the association between a series of individual retirement planning activities and living in the FAD states.FindingsThe study found that living in the FAD states was negatively associated with both having retirement accounts and contributing regularly to retirement accounts. Overall, the findings of this study underscore the need for providing greater access to financial advice and improving financial literacy among financially marginalized populations who are residing in FAD states in the United States of America.Originality/valueThis study makes unique contributions to the literature by raising the issue of geographic inequality in terms of access to financial advice and introducing the innovative notion of FADs. The findings provide fresh insights into the understanding of retirement planning and preparedness from the perspective of state-level inequality of financial advice through PFAs and CFP professionals, thereby expanding the previous knowledge that emphasizes only individual- and household-level differences. Significant implications for public policies and practitioners are also discussed.

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“…Some studies, however, examine the role of an investment advisor in individuals' financial life by evaluating their portfolio performance. Findings from these studies were controversial (Lei & Yao, 2016). While there are many potential reasons for this controversy, it is apparent that their analyses are based on different sampling techniques and some samples are not representative of the underlying population.…”

Section: Introductionmentioning

confidence: 99%

Use of Advisors and Retirement Plan Performance

Yao¹,

Wu²,

Mendenhall³

2020

Journal of Financial Counseling and Planning

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As defined contribution (DC) plans become more popular than defined benefit (DB) plans, American workers are increasingly responsible for their retirement savings. Because retirement plan participants’ portfolio allocation is constrained by the available funds in the plan, the construction of a plan’s investment menu has become extremely important. No research has evaluated fund selection in retirement plans or compared plans involving an advisor with self-directed plans. To fill this research gap, this study employs cross-sectional, nationwide data that include 5,570 retirement plans with 100 or more participants in 2013, 2014, and 2015. Results show that in most cases, using advisors is not related to plan performance. Plan sponsors should require advisors to periodically evaluate the performance of plans under their management using objective measures.

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Use of Financial Planners and Portfolio Performance

Cited by 14 publications

References 74 publications

Use of social networks in stock investment

Use of social networks in stock investment

Surviving in financial advice deserts: limited access to financial advice and retirement planning behavior

Use of Advisors and Retirement Plan Performance

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