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Welcome to the 2018 AFS Annual Meeting, being held this year, in conjunction with FPA in Chicago!

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Oral Session [clear filter]
Wednesday, October 3
 

10:45am

G1a - Age Differences in Risk Tolerance and Risk Domains
This essay investigates the hypothesis that individuals typically become less risk tolerant as they grow older. More specifically, it investigates individuals’ personal perceptions of their own risk attitudes with respect to different risk domains, these are health, money, career, safety, and leisure domains. The study uses data on the degree of risk tolerance with respect to these five different domains, in addition to individuals’ financial portfolio risk to investigate whether decline in risk tolerance is associated with aging and whether this hypothesis is true regardless of the risk-specific domain. The analysis uses longitudinal data from the Germany.

Author(s): Muna Alabed, Charlene Kalenkoski

Presenters
avatar for Muna Alabed

Muna Alabed

Research Assistant, PhD Candidate, Texas Tech University


Wednesday October 3, 2018 10:45am - 11:45am
Michigan 1A

10:45am

G1b - Financial Self-Assessment and Households’ Well-Being in an Emerging Market
This study investigates the financial self-assessment and households’ well-being using a national survey of 2,567 households in Turkey. We use households’ views on their ability to meet current living expenses in the short-term as well as their assessment for the retirement in the long-term. We also investigate how the sources of income are related to the financial well-being. Findings show that households’ daily concerns including the inability to meet short-term expenses including health care, daily living expenses (food and utilities), and the inability to maintain the existing living standard are highly significant factors in explaining their financial assessment. We also find that having enough income during the retirement and ability to find a job in the future when needed are positively related to financial well-being. Finally, when households’ income is from work, rental properties, family, and pension, they feel financially more secure.

Author(s): Halil Kiymaz, Belma Ozturkkal

Presenters
avatar for Halil Kiymaz

Halil Kiymaz

Bank of America Professor of Finance, Rollins College


Wednesday October 3, 2018 10:45am - 11:45am
Michigan 1A

10:45am

G2a - Cost Efficiencies in the Management of Commodity Mutual Funds
We examine determinants of cost efficiencies in the U.S. commodity mutual fund industry for the period 2001 to 2016. Empirical results show that cost increases in the U.S. commodity mutual fund industry have been less than proportional to increases in fund assets, pointing to economies of scale for the industry. Average cost elasticity varies by fund size, existence of 12b-1 fees, load versus no-load funds, and institutional versus retail funds. Funds without a 12b-1 plan show larger economies of scale than funds with a 12b-1 plan. Institutional funds show greater economies of scale than retail funds since 2010.

Author(s): Tim Mooney, D.K. Malhotra, Raymond Poteau

Presenters
TM

Tim Mooney

Assistant Professor of Finance, Thomas Jefferson University


Wednesday October 3, 2018 10:45am - 11:45am
Michigan 1B

10:45am

G2b - CANCELLED - The Willingness of Allocating Funds to Longevity Income: A Comparison by Age.
An increase in the expected longevity of older Americans increases their risk of outliving their assets. Previous research examines the characteristics of individuals who tend to have a demand for immediate annuities. However, few studies look at deferred income annuities (aka longevity income). This paper first uses a probit regression to examine the age groups that are willing to allocate a positive amount to the purchase of longevity income. From amongst the individuals who are willing to allocate a positive amount, it then uses an ordered probit regression to examine the quintiles in which individuals among the different age ranges are willing to allocate their funds. The results show that, individuals who have a higher demand for the purchase of longevity income and not necessarily the ones who are willing to allocate the most funds to it. These results could be of interest to financial planners and other related practitioners.

Author(s): Zunaira Khalid, Michael A. Guillemette, Christopher M. Browning

Presenters
ZK

Zunaira Khalid

Graduate Student, Texas Tech University


Wednesday October 3, 2018 10:45am - 11:45am
Michigan 1B

10:45am

G3a - Are ‘Adult’ Sources of Windfalls Destined to be Spent ‘Responsibly’? (And Are Other Windfalls Spent Hedonistically?)
The goal of this paper is to test to see whether what people would buy differs by windfall source. Basically, our hypothesis is that the more ‘adult’ the source of the windfall, such as a work bonus, tax refund and perhaps inheritance, the more one would spend on ‘responsible’ uses, like household expenses and durable goods, such as a car or washing machine. Alternatively, the more hedonistic sources, like lottery and game show winnings, would be spent on ‘fun’. An alternative measure explored would be ‘euphoria’. Are the more exciting or euphoric sources like game show, bonus or lottery, spent more for fun than the less exciting sources like a tax refund or inheritance?

Author(s): Eugene Bland, Valrie Chambers

Presenters
EB

Eugene Bland

Texas A&M University - Corpus Christi


Wednesday October 3, 2018 10:45am - 11:45am
Michigan 1C

10:45am

G3b - Gender Bias and the Selection of a Financial Advisor
This study investigates whether the presence of same-gender bias exists when investors select a financial advisor. Through an online survey, approximately half of the sample was asked to consider two advisors, a financial planner who was male and an investment advisor who was female. The other half of the sample were asked to consider the same advisor profiles, only the financial planner was female and the investment advisor was male. The results showed no evidence of same-gender bias, however, females displayed a strong preference for a financial planner, regardless of the advisor’s gender. To try and understand why females preferred financial planners, we found evidence that males and females associate different attributes with financial planners and investment advisors. Specifically, females associate collaborative and easy to talk to/good listener with a financial planner. We also found evidence that investors who value these “soft skills” are more likely to hire a financial planner than an investment advisor.

Author(s): Matthew Sommer, HanNa Lim, Maurice MacDonald

Presenters
MS

Matthew Sommer

Kansas State University


Wednesday October 3, 2018 10:45am - 11:45am
Michigan 1C

10:45am

G4b - Social Isolation in Retirement and the Role of Financial Advisors
To our knowledge, this is the first empirical study in financial planning that explores social isolation and loneliness in retirement and how financial advisors can help. Using data from the Health and Retirement Study (HRS), we found that retirees begin to experience increasing levels of loneliness during the middle of their retirement extending into late retirement. Undoubtedly, this impacts their life quality of life leading to mental and physical illnesses and thus higher health care costs which negatively affects portfolio sustainability and financial goals. As the financial planning industry evolves, financial planners should be more engaged in their client's life.  The results presented in this study provides a practical implication for advisors who work with retirees.

Author(s): Yuanshan (Jimmy) Cheng, Tao Guo, Philip Gibson

Presenters
avatar for Yuanshan (Jimmy) Cheng

Yuanshan (Jimmy) Cheng

Assistant Professor, Winthrop University
Jimmy Cheng is an Assistant Professor of Finance at Winthrop University. He earned his doctoral degree from Texas Tech University. Jimmy is from China and worked for Morningstar Asia for several years. He found his interest in financial planning and decided to get an advanced degree... Read More →


Wednesday October 3, 2018 10:45am - 11:45am
Michigan 2