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Graduate Research

The 2012 CFP Board Registered Program Conference will feature a research poster session for graduate students (both master's and doctoral) to share their unpublished research and studies exploring one or more areas related to the personal financial planning profession. The research poster session will be held during the Welcome Reception at 5:00 p.m. on Thursday, August 9, with the participating students available to discuss their research and studies.

Research Poster Titles:

Financial Stress among College Students: Implications for CFP Board Registered Programs

Stuart Heckman
Ohio State University

Several researchers (Joo, Durband, & Grable, 2008; Northern, O'Brien, & Goetz, 2010; Nelson, Lust, Story, & Ehlinger, 2008) have associated negative behavioral outcomes among college students with financial stress. This study used the Ohio Student Financial Wellness Survey to explore factors related to increased likelihoods of financial stress among college students. It was found that a high proportion of students, 72%, reported feeling stressed because of their finances. Logistic regression was used to estimate the likelihood of reporting financial stress. Students with more positive financial behaviors were significantly less likely to feel stressed, and students who are financially responsible for another person were significantly more likely to be stressed. There were also differences in the type of institution attended; compared to four year public universities, students at community colleges were more likely to report financial stress while students at private universities were less likely to report financial stress. These findings can help inform peer financial counseling efforts at CFP Board Registered Programs and provide further evidence that financial planning programs can bring substantial benefits to university campuses. Due to the increased levels of financial stress at community colleges, program directors should consider collaborating with local community colleges to offer peer financial counseling services. This could potentially increase program awareness and help with recruiting efforts. Lastly, this study highlights the fact that many college students are stressed because of their finances. Therefore, program directors should consider using reduction in financial stress as a measure of success for peer financial counseling programs.

Impact of the Great Recession on Wealth and Portfolio Allocation of the Elderly

Eakamon Oumtrakool
Texas Tech University

Using the 2008 and 2010 wave of the Health and Retirement Study, we investigate the effect of the Great Recession on changes in households' net worth and portfolio allocations. This paper provides evidence that business owners, households with higher education, low and middle net worth households, and households expecting to leave a bequest were more likely to have an increase in their net worth. On the other hand, decline in net worth is related to having high level of exposure to stocks, having residence in the West region, white households, and high net worth households. Time-varying risk aversion could influence changes in asset allocation. During the period, equity allocations among elderly households have declined. Specifically, we find that less educated, black, high net worth households, and households older than 75, were more likely to actively reduce their exposure to stocks. In addition, females, those who identified as experiencing depression and low cognitive score households relate to exhibiting extreme levels of shifting away from stock exposure.

Perceptions of Financial Planners Regarding Factors that Affect the Development of Planning and Client Communication Techniques in Practice

Benjamin F. Cummings, Scholar in Residence
Certified Financial Planner Board of Standards, Inc.

Like many professions, financial planners develop their planning and communication techniques in education and practice. However, little is known about what contributes to the development of these techniques, especially once planners enter the work force. We seek to provide insight about the development of financial planners early in their career. We interviewed four financial planners and identified factors that they attribute as being influential to their ability to develop and communicate client recommendations. We achieved triangulation through interviews with colleagues of the financial planners as well as a focus group of the participants. Participants identify the influential role of mentorship, especially through modeling and guided reflection. Participants also identify reflective practice as playing a considerable role in development. Among other things, these influences help participants increase confidence in planning and learn to appropriately communicate technical knowledge. The results of this study have implications for both financial planning education and practice. The factors that impact the career development of beginning financial planners can be replicated in education programs and in induction programs in practice.

Reasons Why U.S. Households Underuse Comprehensive Financial Planners

Areerat Lertchaipitak
Texas Tech University

This paper investigates reasons why U.S. households underuse comprehensive financial planning services, and uses logistic regression to predict the characteristics of those individuals who choose to manage their own comprehensive financial plans. The top three reasons for not using the services are: no explicit reason, expensive service fees, and belief they can do better themselves. The characteristics of households that tend to do their own financial plan as their first option are high incomes, moderate investable assets, and members who are old in age, male, or minorities.


Retirement Saving and the Use of Financial Planners

Terrance Martin Jr. and Michael Finke, CFP®
Texas Tech University

Prior research finds that a large proportion of U.S. households have inadequate retirement saving. While most Americans believe they are not saving enough for retirement, few are able to increase retirement saving on their own due to a lack of knowledge and inertia. Professional financial advisors can help a household estimate how much they will need to save to meet retirement goals, and can help them create a plan that leads to greater savings.

Despite the apparent benefit from professional advice, few studies are able to document the benefit from financial advice primarily because they focus on investment returns. This paper examines the effect of professional financial advice on retirement saving. We use both the 2004 and 2008 waves of the National Longitudinal Survey of Youth to estimate the impact of advice professionals on total retirement savings and change in amount saved. We also improve on the prior literature by identifying financial advisors who do and do not estimate retirement needs in order to estimate the impact of retirement advice on retirement outcomes.

We find that the use of professional financial advice is associated with an increase likelihood of calculating retirement income needs and owning tax advantage accounts. Households that use comprehensive financial advice have higher mean retirement savings compared to households that use less comprehensive advisor services, and have a greater change in retirement savings between two survey years. Results provide evidence that households who use advisors accumulate much more retirement wealth, and a retirement plan is essential to improving outcomes.

Council On Education
CFP Board’s Council on Education advises CFP Board on the development and clarification of all educational policies related to the CFP® certification process.