Behavioral Influences on Retirement Planning

Behavioral Influences on Retirement Planning

Author: Janet Aschkenasy

Publisher:

ISBN: 1937504697

Category:

Page: 94

View: 564

The supposed rational logic of the market is no longer understood to exclusively motivate economic decision making. Behavioral economics is now a vital part of university curriculums. Both lay persons and professional retirement investors at times manage money on irrational behavioral factors. Janet Aschkenasy, a veteran business writer, discusses the insights of leading behavioral economics scholars and draws upon current research to describe "decision making" practices among individuals and retirement managers. Often higher investment returns are forfeited to a behavioral reflex. This book explores common behavioral factors and how retirement plans have attempted to minimize non-rational behavioral retirement investment.

Psychology of Financial Planning

Psychology of Financial Planning

Author: Brad Klontz

Publisher: John Wiley & Sons

ISBN: 9781119983729

Category: Business & Economics

Page: 300

View: 962

Psychology of Financial Planning: The Practitioner’s Guide to Money and Behavior In PSYCHOLOGY OF FINANCIAL PLANNING: The Practitioner’s Guide to Money and Behavior, distinguished authors Drs. Brad Klontz, CFP®, Charles Chaffin, and Ted Klontz deliver a comprehensive overview of the psychological factors that impact the financial planning client. Designed for both professional and academic audiences, PSYCHOLOGY OF FINANCIAL PLANNING is written for those with 30 years in practice as well as those just beginning their journey. With a focus on how psychology can be applied to real-world financial planning scenarios, PSYCHOLOGY OF FINANCIAL PLANNING provides a much-needed toolbox for practicing financial planners who know that understanding their client’s psychology is critical to their ability to be effective. The PSYCHOLOGY OF FINANCIAL PLANNING is also a much-needed resource for academic institutions who now need to educate their students in the CFP Board’s newest category of learning objectives: psychology of financial planning. Topics include: Why we are bad with money Client and planner attitudes, values, & biases Financial flashpoints, money scripts, and financial behaviors Behavioral finance Sources of money conflict Principles of counseling Multicultural competence in financial planning General principles of effective communication Helping clients navigate crisis events Assessment in financial planning Ethical considerations in the psychology of financial planning Getting clients to take action Integrating financial psychology into the financial planning process PSYCHOLOGY OF FINANCIAL PLANNING goes beyond just theory to show how practitioners can use psychology to better serve their clients. The accompanying workbook provides exercises, scripts, and workshop activities for firms and practitioners who are dedicated to engaging and implementing the content in meaningful ways.

Investor Behavior

Investor Behavior

Author: H. Kent Baker

Publisher: John Wiley & Sons

ISBN: 9781118492987

Category: Business & Economics

Page: 640

View: 839

WINNER, Business: Personal Finance/Investing, 2015 USA Best Book Awards FINALIST, Business: Reference, 2015 USA Best Book Awards Investor Behavior provides readers with a comprehensive understanding and the latest research in the area of behavioral finance and investor decision making. Blending contributions from noted academics and experienced practitioners, this 30-chapter book will provide investment professionals with insights on how to understand and manage client behavior; a framework for interpreting financial market activity; and an in-depth understanding of this important new field of investment research. The book should also be of interest to academics, investors, and students. The book will cover the major principles of investor psychology, including heuristics, bounded rationality, regret theory, mental accounting, framing, prospect theory, and loss aversion. Specific sections of the book will delve into the role of personality traits, financial therapy, retirement planning, financial coaching, and emotions in investment decisions. Other topics covered include risk perception and tolerance, asset allocation decisions under inertia and inattention bias; evidenced based financial planning, motivation and satisfaction, behavioral investment management, and neurofinance. Contributions will delve into the behavioral underpinnings of various trading and investment topics including trader psychology, stock momentum, earnings surprises, and anomalies. The final chapters of the book examine new research on socially responsible investing, mutual funds, and real estate investing from a behavioral perspective. Empirical evidence and current literature about each type of investment issue are featured. Cited research studies are presented in a straightforward manner focusing on the comprehension of study findings, rather than on the details of mathematical frameworks.

Pension Design and Structure

Pension Design and Structure

Author: Olivia S. Mitchell

Publisher: OUP Oxford

ISBN: 9780191534249

Category: Business & Economics

Page: 320

View: 711

Employees are increasingly asked to make sophisticated decisions about their pension and healthcare plans. Yet recent research shows that the decisions 'real' people make are often not those of the careful and well-informed economic agent conventionally portrayed in economic research. Rather, decision-makers tend to operate with flawed information and make some of the most critical financial decisions of their lives lacking a full understanding of the options before them and the implications of their decisions. Pension Design and Structure explores the assumptions behind commonly-held theories of retirement decision-making, in order to draw out the consequences of frontier research in behavioral finance and economics for those interested in better design and structure of retirement pensions. Using large datasets newly provided by financial service firms and real-world experiments, this volume tests the hypotheses of this research. This is the first book to explore the implications of behavioral finance research for pensions and retirement studies. The authors blend cutting-edge research from several fields including Finance, Economics, Management, Sociology, and Psychology. The book will be of interest to pension plan participants and sponsors, financial service groups responsible for pensions, and retirement system regulators.

Behavioral Economics and the Impact of Message Framing on Financial Planning Intentions

Behavioral Economics and the Impact of Message Framing on Financial Planning Intentions

Author: Timothy Michael Todd (Jr)

Publisher:

ISBN: OCLC:1197974500

Category:

Page:

View: 845

Neoclassical economics asserts that individuals maximize their utility subject to constraints, such as income. Rational choice and expected utility theories are natural outgrowths of utility maximization and posit that, when making decisions, individuals consider all information, weigh the costs and benefits, and then consistently make the best choice to maximize their utility. Behavioral economics, on the other hand, advances that these constant-rationality assumptions are dubious and unrealistic. Among other things, behavioral economics recognizes that individuals use heuristics and that decision making can be subject to cognitive biases, which cause divergences from neoclassical rational choice expectations. A popular (and growing) use of applied behavioral economics is in "choice architecture" and "nudges"-that is, increasing desirable outcomes by strategically structuring information and choices (i.e., the framing of information and choices). In financial planning, there are many financially healthy behaviors, such as planning for retirement, engaging in monthly budgeting, and ensuring that various risks are covered by insurance. Despite these tasks being objectively useful, positive, and valuable behaviors, many individuals do not engage in these behaviors (or other behaviors that are regularly recommended by financial advisors and planners). Therefore, this dissertation investigated whether applying a behavioral economics-based approach-namely narrative message framing through a prospect theory lens-affected the intentions to engage in retirement planning, monthly budgeting, and analyzing the need for insurance. In short, whether narrative message framing can be used as a "nudge" to increase financial planning intentions. This study also incorporated regulatory focus theory, which regards how individuals self-regulate. Under this theory, framing effects may be stronger when the frame matches the individual's regulatory focus-this is known as regulatory fit. Using primary data from randomized experiments, this dissertation explored three financial planning domains and investigated four research questions in each domain: (a) the effect of narratives on financial-planning intentions; (b) whether the valence of the narrative (positive or negative framing in the story) mattered (and if this varied by domain); (c) whether the framing effect, if any, depended on the individual-level characteristic of regulatory focus; and (d) whether regulatory fit enhanced framing effects. The three financial planning domains explored were retirement planning (a behavior with future consequences), cash-flow and budget planning (a behavior with present consequences), and insurance-needs planning (a behavior that involved risk analysis). Results indicated that narrative message framing was effective to increase financial planning intentions. Moreover, the framing effect depended on the underlying financial behavior. The framing effect also varied based on the individual's regulatory focus. Stated simply, stories were powerful, framing mattered, and people responded differently to those frames. These findings are relevant to financial planners, financial services companies, financial-related non-profits and professional organizations, and policymakers, among others, all of whom can use these results to increase (nudge) the intentions to engage in various positive financial behaviors.

Behavioral Dimensions of Retirement Economics

Behavioral Dimensions of Retirement Economics

Author: Henry Aaron

Publisher: Brookings Institution Press

ISBN: 0815705530

Category: Business & Economics

Page: 289

View: 540

Deciding when and how to retire are among the most important decisions most people make. Can they be depended on to plan with foresight and make sound decisions? According to standard economic analysis the answer is a qualified "yes." But studies by psychologists, sociologists, and economists themselves raise doubts about this comforting appraisal. This volume by analysts trained in economics and other disciplines suggests that retirement planning and decisions fall far short of the rational ideal. Gary Burtless explains what economic research has to say about retirement behavior. Annamaria Lusardi reports that many people in their fifties and older say they have not even thought about retirement. Mathey Rabin and Ted O'Donoghue show that procrastination can cause huge economic losses. Robert Axtell and Joshua Epstein show that herd behavior explains observed patterns of retirement behavior better than does the assumption of rational decisionmaking. George Loewenstein, Drazen Prelec, and Roberto Weber report that many people incorrectly anticipate what retirement will be like and rationalize whatever decision they have made. David Fetherstonhaugh and Lee Ross report experimental evidence that the effect of Social Security provisions may depend on how these policies are "framed" as well as on the specific content of those policies. These and other authors also explore the broader implications of these behavioral patterns. Copublished with Russell Sage Foundation

Contemporary Issues in Behavioral Finance

Contemporary Issues in Behavioral Finance

Author: Simon Grima

Publisher: Emerald Group Publishing

ISBN: 9781787698819

Category: Business & Economics

Page: 320

View: 474

This special edition of Contemporary Studies in Economic and Financial Analysis offers seventeen chapters from invited participants in the International Applied Social Science Congress, held in Turkey between the 19th and 21st April 2018.

Client Psychology

Client Psychology

Author: CFP Board

Publisher: John Wiley & Sons

ISBN: 9781119440901

Category: Business & Economics

Page: 336

View: 676

A Client-Centered approach to Financial Planning Practice built by Research for Practitioners The second in the CFP Board Center for Financial Planning Series, Client Psychology explores the biases, behaviors, and perceptions that impact client decision-making and overall financial well-being. This book, written for practitioners, researchers, and educators, outlines the theory behind many of these areas while also explicitly stating how these related areas directly impact financial planning practice. Additionally, some chapters build an argument based solely upon theory while others will have exclusively practical applications. Defines an entirely new area of focus within financial planning practice and research: Client Psychology Serves as the essential reference for financial planners on client psychology Builds upon and expands the body of knowledge for financial planning Provides insight regarding the factors that impact client financial decision-making from a multidisciplinary approach If you’re a CFP® professional, researcher, financial advisor, or student pursuing a career in financial planning or financial services, this book deserves a prominent spot on your professional bookshelf.

Individual Financial Planning for Retirement

Individual Financial Planning for Retirement

Author: Nicole Brunhart

Publisher: Springer Science & Business Media

ISBN: 9783790819984

Category: Business & Economics

Page: 443

View: 977

Over time, the responsibility for providing for a financially secure retirement has shifted towards the individual. Building on a new structure applied to insights drawn from behavioral finance, this book analyzes the perspectives of individuals with regard to their financial situation in retirement and compares the actions they take with ideal behavior. The work provides new insights into the broadly defined topic of individual retirement-specific financial planning behavior.

Pensions in the Health and Retirement Study

Pensions in the Health and Retirement Study

Author: Alan L. Gustman

Publisher: Harvard University Press

ISBN: 0674048660

Category: Business & Economics

Page: 367

View: 396

This book presents a careful analysis of pension data collected by the Health and Retirement Study, a unique survey of people over the age of fifty conducted by the University of Michigan for the National Institute on Aging. The authors studied pensions as they evolve over individuals’ work lives and into retirement: how pension coverage and plans change over a lifetime, how many pensions workers have by the time they retire and what these pensions are worth, what pensions contribute to individual retirement incomes, and how trends and policy changes affect retirement plans. The book focuses on the major features of pensions, including plan type and participation, ages of eligibility for retirement, values of different pension types, how pension values are influenced by retirement age, how plans are settled when a worker leaves a firm, how well people understand their pensions, the importance of pensions in retirement saving and as a share of household wealth, and the vulnerability of the retirement age population to the current financial crisis. This book provides readers with an invaluable look at the crucial but ever-changing role of pensions in supporting retirees.

Financial Behavior

Financial Behavior

Author: H. Kent Baker

Publisher: Oxford University Press

ISBN: 9780190269999

Category: Business & Economics

Page: 658

View: 492

Financial Behavior: Players, Services, Products, and Markets provides a synthesis of the theoretical and empirical literature on the financial behavior of major stakeholders, financial services, investment products, and financial markets. The book offers a different way of looking at financial and emotional well-being and processing beliefs, emotions, and behaviors related to money. The book provides important insights about cognitive and emotional biases that influence various financial decision-makers, services, products, and markets. With diverse concepts and topics, the book brings together noted scholars and practitioners so readers can gain an in-depth understanding about this topic from experts from around the world. In today's financial setting, the discipline of behavioral finance is an ever-changing area that continues to evolve at a rapid pace. This book takes readers through the core topics and issues as well as the latest trends, cutting-edge research developments, and real-world situations. Additionally, discussion of research on various cognitive and emotional issues is covered throughout the book. Thus, this volume covers a breadth of content from theoretical to practical, while attempting to offer a useful balance of detailed and user-friendly coverage. Those interested in a broad survey will benefit as will those searching for more in-depth presentations of specific areas within this field of study. As the seventh book in the Financial Markets and Investment Series, Financial Behavior: Players, Services, Products, and Markets offers a fresh looks at the fascinating area of financial behavior.

CFP Board Financial Planning Competency Handbook

CFP Board Financial Planning Competency Handbook

Author: CFP Board

Publisher: John Wiley & Sons

ISBN: 9781119094982

Category: Business & Economics

Page: 944

View: 915

The official CFP guide for career excellence CFP Board Financial Planning Competency Handbook is the essential reference for those at any stage of CFP certification and a one-stop resource for practitioners looking to better serve their clients. This fully updated second edition includes brand new content on connections diagrams, new case studies, and new instructional videos, and a completely new section devoted to the interdisciplinary nature of financial planning. You'll gain insights from diverse fields like psychology, behavioral finance, communication, and marriage and family therapy to help you better connect with and guide your clients, alongside the detailed financial knowledge you need to perform to the highest expectations as a financial planner. The only official CFP Board handbook on the market, this book contains over ninety chapters that are essential for practitioners, students, and faculty. Whether a practitioner, student, or faculty member, this guide is the invaluable reference you need at your fingertips. Comprehensive, clear, and detailed, this handbook forms the foundation of the smart financial planner's library. Each jurisdiction has its own laws and regulations surrounding financial planning, but the information in this book represents the core body of knowledge the profession demands no matter where you practice. CFP Board Financial Planning Competency Handbook guides you from student to practitioner and far beyond, with the information you need when you need it.