The Impact of Financial Advisors on the Subsequent Wealth of Older Adults
Benjamin F. Cummings
Saint Joseph's University - Department of Finance
Russell N. James III
Texas Tech University
March 15, 2014
Despite the growing use of financial advisors, relatively little is known about the impact that financial advisors have on actual wealth outcomes among older adults. Using data from the Study of Assets and Health Dynamics Among the Oldest Old (AHEAD), we find that using a financial advisor is positively related to subsequent net worth, especially on net worth values more than a decade after initially reporting the use of professional financial advice. Having a financial advisor is also positively associated with current and subsequent investment returns, and a large factor impacting the difference in returns comes is due to differences in portfolio allocations. Specifically, we find evidence that the impact of a financial advisor on subsequent wealth is likely due to a greater allocation to equities.
Number of Pages in PDF File: 38
Keywords: financial advice, household finance, financial advisor, AHEAD, equity market participation
JEL Classification: D14, D31working papers series
Date posted: May 10, 2014
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