Financial News and Client Stress : Understanding the Association from a Financial Planning Perspective

John E. Grable,Sonya L. Britt 한국재무학회 2012 한국재무학회 학술대회 Vol.2012 No.05

Building client-planner relationships based on trust requires financial planners to demonstrate both technical competence and communication skills. Emerging evidence also suggests that managing client stress can lead to better client-planner interactions. This paper addresses a common question asked within the field of financial planning; namely, is financial news associated with client stress. Results from this experimental study suggest that financial planners should opt to turn off financial news programs, such as CNBC, Bloomberg, and Fox Business News in the presence of clients. Financial news was found to increase stress levels, particularly among men. Positive financial news (e.g., reports of bullishness in the stock market) created the highest levels of stress. It was hypothesized that positive financial news may trigger regret among some people.

Financial News and Client Stress

John E. Grable,Sonya L. Britt 한국FP학회 2012 Financial Planning Review Vol.5 No.3

재무설계사는 고객과 신뢰감 있는 관계를 형성하기 위해서 전문역량과 의사소통기술을 보여주어야 한다. 이와 더불어 최근에는 고객의 스트레스를 관리하여 주는 것이 고객과 설계사간의 관계를 향상시키는데 기여할 수 있다는 증거가 나타나고 있다. 본 연구는 금융뉴스는 고객의 스트레스와 관계가 있는가라는 재무설계현장에서 자주 제기되고 있는 문제를 다루었다. 본 연구를 통해 실시된 실험을 통하여 나타난 연구결과는 고객 앞에서는 CNBC, 블룸버그, 팍스경제뉴스 등과 같은 금융뉴스를 끄라고 제안한다. 금융뉴스는 스트레스를 증가시키는데 특히 남성에게 더욱 그러하다. 주식시장의 상승소식과 같은 긍정적인 금융뉴스는 스트레스지수를 가장 높게 만드는 뉴스였다. 긍정적 금융뉴스는 후회감을 야기시키는 것으로 사료된다. Building client?planner relationships based on trust requires financial planners to demonstrate both technical competence and communication skills. Emerging evidence also suggests that managing client stress can lead to better client-planner interactions. This paper addresses a common question asked within the field of financial planning; namely, is financial news associated with client stress. Results from this experimental study suggest that financial planners should opt to turn off financial news programs, such as CNBC, Bloomberg, and Fox Business News in the presence of clients. Financial news was found to increase stress levels, particularly among men. Positive financial news(e.g., reports of bullishness in the stock market) created the highest levels of stress. It was hypothesized that positive financial news may trigger regret among some people.

Zeta Estimates of Wealth Volatility and Financial Planning Horizon

John E. Grable,Swarn Chatterjee 이화여자대학교 사회과학연구소 2014 사회과학연구논총 Vol.30 No.2

The intention of this study was to document how closely households follow normative descriptions of financial behavior in relation to their financial planning horizon. Modern Portfolio Theory predicts that households, in general, exhibit risk aversion. Aversion to wealth volatility should correspondingly be highest among those households with the shortest planning horizons. This study estimated percentage changes in wealth and wealth volatility over time categorized by financial planning horizon using data from the 2002 through 2010 waves of Health and Retirement Study. Modigliani ratios were computed for the entire population and by planning horizon. Zeta estimates were made by calculating the difference between the Modigliani ratios for each planning horizon and the ratio for the short-term horizon. Contrary to the conceptualized relationship between planning horizon and financial wealth volatility, results from this study show that respondents with the shortest financial planning horizons experienced lower risk-adjusted returns and greater wealth volatility. The findings of this study underscore an unmet and perhaps unrealized need for professionally provided financial planning.

Risk Tolerance Assessment : Research and Practice

John E. Grable 한국재무학회 2010 한국재무학회 학술대회 Vol.2010 No.05

The Association Between Financial Knowledge Confidence Bias and Financial Behavior

John E. Grable(존 그래이블),Joo-Yung Park(박주영),So-Hyun Joo(주소현) 한국FP학회 2012 Financial Planning Review Vol.5 No.1

본 연구는 재무지식에 대한 자신감이 재무관리 행동양식에 영향을 준다는 가설을 검정 하고자 하였으며 이러한 자신감 편향 영향이 국가 간에 다르게 나타나는지 여부를 살펴 보고자 하였다. 자신감 편향 개념은 주관적 척도로만 측정하지 않고, 주관적 점수와 객관적 점수를 토대로 예측된 주관적 점수 간의 편향(차이)을 측정하여 사용하였다. 연구 결과로는 첫째, 한국인과 미국인의 객관적 재무지식 수준을 측정한 결과 미국인의 경우 한국인에 비해 객관적인 평가점수가 더 높게 나타났지만, 자신감 편향에서는 두 국가 간에 차이가 나타 나지 않았다. 둘째, 한국인이 미국인에 비해 취약한 것으로 나타난 영역은 금융피해 사후 대처방안, 인플레이션과 금리의 관계성과 같은 시장경제원리, 투자 상품, 퇴직연금으로 나타났다. 셋째, 재무지식에 대한 자신감은 재무행동에 영향을 미치는 것으로 나타났으며 자신의 재무지식에 대한 자신감이 부적한 소비자일수록 재무행동 점수가 낮은 것으로 나타났다. 이에 금융소비자의 자신감 부족상태를 해소하기 위해서 특히 취약한 영역을 중심으로 지식, 태도, 기능이 균형 잡힌 교육을 제공하고, 국민 전체를 대상으로 재무교육 기회를 균등하게 제공하며, 학교를 통한 조기교육 효과를 극대화할 수 있도록 정책적 지원을 요청할 것 등을 제언하였다. This research tried to examine the relationship between financial knowledge confidence and financial behavior. Previously van Rooik et al. (2011) hypothesized that those who exhibit financial knowledge confidence ought to display better financial behavior. The purpose of this study was to test this hypothesis using a differential prediction model. Differential prediction relies on assessing both subjective and objective measures of financial knowledge, rather than depending only on a respondent’s subjective indication of confidence. Using a cross-national sample of Americans and Koreans, it was determined that Americans scored higher on both the subjective and objective measures of financial knowledge but that there were no significant differences between the two nationalities in terms of financial knowledge confidence. However, only partial support was noted for the research hypothesis. Americans who exhibited financial knowledge under-confidence were found to be more likely to report a lower financial behavioral grade. The effect of confidence bias for Koreans was not significant, holding other factors constant. When viewed as a full sample, income, age, LOC, and financial knowledge confidence were associated with financial behavior.

Wealth Accumulation Status

John E. Grable,So-Hyun Joo(주소현),Michelle Kruger 한국FP학회 2017 Financial Planning Review Vol.10 No.1

본 연구에서는 미국에서 발간된 책 중에서 부유층(millionaires)의 특성을 연구한 가장 영향력 있는 책인 Stanley & Danko (1996)의 The Millionaire Next Door에서 말하는 자산축적상태에 영향을 미치는 요인을 확인해 보고자 하였다. 구체적으로 종단연구자료인 National Longitudinal Survey of Youth (NLSY79)의 자료를 활용하여 Stanley & Danko가 제시한 라이프사이클에 따른 바람직한 자산축적 목표에 도달한 가계의 특성을 살펴보고자 하였다. 1992년, 2002년, 2012년에 대한 분석결과 미국가계에서 Stanley & Danko가 제시한 자산축적 목표에 도달한 가계는 많지 않았으며 자산축적 상태는 상대적으로 유동적이라는 것을 밝혔다. 또한, 인종, 저축행동, 유산을 상속받은 경우가 자산축적 목표에 도달할 가능성과 밀접한 관련을 보이는 변수로 밝혀졌다. 라이프사이클에 따라 자산축적 목표에 도달하는 것은 재무목표 실현과 밀접한 관련을 보이며, 바람직한 방향으로 자산을 축적하는 가계의 특성을 파악하는 것은 재무설계 실무에 유용한 정보를 제공할 수 있을 것으로 보인다. The purpose of this study was to test several propositions imbedded in Stanley and Danko’s (1996) ground breaking book, The Millionaire Next Door. Given the book’s impact in shaping the type of advice provided by those in the media and many financial planners and wealth managers, this study was designed to evaluate the impact saving and receiving an inheritance play in shaping wealth accumulation status. Using data from the National Longitudinal Survey of Youth (NLSY79), the study focused on answering a series of research questions related to wealth accumulation―as defined by Stanley and Danko―over the lifecycle. Results show that the percent of the American population that meets or exceeds wealth accumulation targets was not particularly large in 1992, 2002, or 2012. Results also indicate that wealth accumulation status is relatively fluid. Findings show that Whites and those who have received an inheritance, and to some extent active savers, are more likely to accumulate wealth over the lifecycle. Opportunities for additional research are presented.

Anticipating Changes in Client Risk Tolerance

John E. Grable.D.,Joo Yung Park(박주영),Hyuncha Choe(최현자) 한국FP학회 2011 Financial Planning Review Vol.4 No.1

재무설계사들과 재무 분야의 연구자들은 한 개인의 재무위험 수용성향이 장기간에 걸쳐 변화하지 않는다는 가정 하에, 고객에게 서비스를 제공하거나 연구를 수행하는 경우가 많다. 이는 대부분의 재무설계 및 투자 전략에 있어서 강조되고 있는 주요 가설이기도 하다. 본 연구에서는 다기간에 걸친 소비자의 위험수용 성향을 분석함으로써 실제로는, 앞서 밝힌 기존의 가설과는 다르게, 개인의 위험수용 성향이 변화하였음을 밝혔다. 연구 수행을 위해 패널자료인 National Longitudinal Survey of Youth 자료를 사용하였으며, 회귀분석 및 Decision Tree를 사용하여 분석하였다. 결과에 따르면, t-1 시점의 위험 수용성향이 t 시점의 위험 수용성향 예측에 가장 중요한 요인인 것으로 나타났다. 즉, t-1 시점에서 매우 낮은 수준의 위험 수용성향을 보인 사람들이 t 시점에서는 위험수용 수준이 상승하는 양상을 보인 반면, t-1 시점에서 높은 수준의 위험 수용성향을 보인 사람들이 t 시점에서는 위험수용 수준이 하강하는 양상을 보였다. 또한, 가계소득과 소득의 변화 요인도 위험에 대한 태도 변화 예측에 중요한 요인인 것으로 나타났다. 본 연구의 결과는 재무설계사들이 고객의 기간간 위험수용성향 변화를 예측하는 데 유용하게 사용되어 질 것으로 기대된다. Financial planners and risk researchers often assume that a person’s tolerance for financial risk remains stable over time. This is a key assumption underlying most financial planning investment strategies. This paper shows that while risk-tolerance, when measured at the aggregate level, appears to remain relatively stable, there is actually a great deal of inter-period shifting in risk-tolerance preferences among individuals. A regression and classification tree methodology was used with 2008 National Longitudinal Survey of Youth - 1979 cohort to provide a methodology that financial planners can use to anticipate and predict who is likely to either increase or decrease their tolerance for financial risk from one period to another. Results suggest that prior period risk tolerance is the best predictor of subsequent risk shift, with those exhibiting very low tolerance for risk shifting to a higher risk tolerance, and those with a high risk tolerance decreasing their tolerance for risk in later periods. Net household income and changes in income were also noted to be important predictors of shifting attitudes towards risk.

An Assessment of the Strength of Association between Stated and Revealed Risk-Preference Measures

John E. Grable,So-Hyun Joo(주소현),Eun-Jin Kwak(곽은진) 한국FP학회 2020 Financial Planning Review Vol.13 No.3

개인의 재무의사결정은 위험에 대한 선호와 밀접한 관련이 있다고 알려져 왔다. 일반적으로 위험에 대한 선호는 위험선호가 응답에 의해 드러나도록 측정하는 방식과 자신의 선호를 직접 지정하도록 하는 방식으로 측정한다. 이러한 방식은 각각 장단점을 가지고 있지만 두 가지 방식의 상호 관련성을 평가한 연구는 많이 존재하지 않는다. 본 연구의 목적은 위험선호가 드러나도록 측정하는 방식과 자신의 위험선호를 지정하는 방식이 서로 어느 정도 관련이 있는가에 대하여 평가하고자 하는 것이다. 추가적으로 본 연구에서는 개인들이 자신의 위험선호를 지정할 때 얼마나 과대 혹은 과소 평가 하는가와 평가에 의한 위험선호가 실제 위험추구 행동과는 어떠한 관련을 보이는지를 살펴보았다. 이러한 목적을 위하여 534명의 성인을 대상으로 온라인 조사를 실시한 결과 드러난 위험선호와 지정한 위험선호가 동일하게 나타난 사람들은 응답자의 약 36%였으며, 자신의 위험선호를 지정하는 경우 드러나는 경우보다 과대평가하는 사람이 많은 것으로 나타났다. 하지만, 개인의 위험선호를 드러나도록 측정하는 방식과 지정하여 측정하는 방식은 실제 위험추구행동과 관련을 보이는 것으로 나타나, 두 가지 방식 중에서 어떠한 방식이 더 우위에 있다고 평가하기는 어렵다고 판단되었다. 개인의 위험선호를 측정함에 있어서 중요한 것은 투자의사결정에서 개인의 선택을 측정할 것인지 혹은 위험추구 행동에 참여하려는 의향을 측정할 것인지를 파악해야 하는 것이라고 할 수 있다. Individual financial decision making is known to be associated with each decision maker’s risk preference. In general, risk preference has been measured either as a stated preference or as a revealed preference. While each assessment method has its own strengths and weaknesses, little research has been conducted to determine the level of association between these two measurement techniques. The purpose of this study was to provide evidence regarding the degree of association between stated and revealed risk-preference assessments. In addition, the extent to which people under- or over-state their preference for financial risk was evaluated by estimating how risk-preference assessment congruency is associated with risk-taking behavior. Using a survey with 534 adults, results from the present study suggest that while scores from stated and revealed financial risk-preference tests are not perfectly fungible, for over one third of individuals, there appears to be congruency between what is stated and what is revealed. For those who exhibit less preference congruency, differences do not appear to be related to risk-taking behavior. A financial decision maker’s revealed risk preference and the same person’s stated risk preference are related to financial risk-taking behavior. This finding suggests that the choice of one measurement technique over another by researchers, policy makers, and investors should not necessarily be made with an assumption that one assessment procedure is better than the other. What may be more important is understanding what is needed in the context of the risky decision being faced by a decision maker, be it a measure of choice or a measure of willingness.

An Estimate of the Mediation Effect of Risk Tolerance among Marital Status, Gender, and Investing Behavior

Heo, Wookjae,Grable, John E.,Nobre, Liana,Ruiz-Menjivar, Jorge The Korean Home Economics Association 2016 International Journal of Human Ecology Vol.17 No.1

This paper presents a series of path models that were developed to test whether financial risk tolerance mediates the association between the following four variables and investing behavior: (a) male and married, (b) female and married, (c) male and single, or (d) female and single. Data for this study were obtained from a proprietary consumer survey of risk-tolerance attitudes. Four path models were developed to test relationships among the variables in 2008, 2009, 2010, and 2011. These years were chosen to represent the depth and recovery periods in the Great Recession. The total number of respondents was 29,641. Findings showed that financial risk tolerance was positively associated with risky investing behavior (i.e., equity ownership) in each of the four periods. The associations among the gender-marital status variables and investing behavior were mixed; however, findings did indicate that risk tolerance mediates these relationships by sometimes amplifying and occasionally attenuating risky behavior. Based on the findings, implications and limitation are presented.

An Estimate of the Mediation Effect of Risk Tolerance among Marital Status, Gender, and Investing Behavior

( Wookjae Heo ),( John E. Grable ),( Liana Nobre ),( Jorge Ruiz-menjivar ) 대한가정학회 2016 International Journal of Human Ecology Vol.17 No.1

This paper presents a series of path models that were developed to test whether financial risk tolerance mediates the association between the following four variables and investing behavior: (a) male and married, b) female and married, (c) male and single, or (d) female and single. Data for this study were obtained from a proprietary consumer survey of risk-tolerance attitudes. Four path models were developed to test relationships among the variables in 2008, 2009, 2010, and 2011. These years were chosen to represent the depth and recovery periods in the Great Recession. The total number of respondents was 29,641. Findings showed that financial risk tolerance was positively associated with risky investing behavior (i.e., equity ownership) in each of the four periods. The associations among the gender-marital status variables and investing behavior were mixed; however, findings did indicate that risk tolerance mediates these relationships by sometimes amplifying and occasionally attenuating risky behavior. Based on the findings, implications and limitation are presented.