Year: 2010
Type: article
Abstract: 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.
Source: Financial Services Review
Authors: Sherman D. Hanna, Suzanne Lindamood
Institution: The Ohio State University
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: diamond
Funder: Texas Tech University
OpenAlex ID: W1555306133