Financial Services Review | 2010
Authors:
DOI: 10.61190/fsr.v19i2.4968
Journal: Financial Services Review
Year: 2010
Publisher: Academy of Financial Services
Document Type: Article
Open Access: All Open Access; Gold Open Access; Green Open Access
Cited by: 40
To estimate the monetary value of ideal financial plannitig advice, we address three types of benefit.s that planners provide: increasing wealth, preventing loss, and smoothing consumption. We discuss, then reject the possibility of using survey data to obtain valid estimates of the benefit of financial planning advice. We instead use theoretical examples based on comparisons of optimal decisions to naive alternatives. We find that the value of advice varies with a client's risk aversion and the percentage of wealth that could be gained or lost. In general, the mo.st risk averse households should place the highest value on comprehensive financial planning advice. Financial planners can use our results to better articulate the value of advice. © 2010 Academy of Financial Services. All rights reserved. >. © 2010 Academy of Financial Services. All rights reserved.
Household finance; Intertemporal choice; Personal financial planning; Portfolio allocation; Risk tolerance