Do as I Say, Not as I Do: An Analysis of Portfolio Development Recommendations Made by Financial Advisors

20 Pages Posted: 21 Sep 2017

See all articles by John Grable

John Grable

University of Georgia - Department of Housing & Consumer Economics

Amy Hubble

University of Georgia

Michelle Kruger

University of Georgia - College of Family and Consumer Sciences, Students

Date Written: September 19, 2017

Abstract

This paper describes how financial advisors rank, weigh, and use client characteristics and portfolio development factors when making an asset allocation recommendation. It was determined that in a scenario free context, a client’s time horizon was the top ranked portfolio development factor. Findings also showed that financial advisors alter the importance of certain factors when working with clients of differing ages and employment status. Additionally, results showed that financial advisors are somewhat inconsistent in their use of portfolio development factors across client scenarios. Finally, findings indicated that older financial advisors with more experience do a better job of matching asset allocation recommendations to normative portfolio guidelines as described in mean-variance optimization models.

Keywords: Asset Allocation, Risk Tolerance, Portfolio Management, Financial Planning

Suggested Citation

Grable, John and Hubble, Amy and Kruger, Michelle, Do as I Say, Not as I Do: An Analysis of Portfolio Development Recommendations Made by Financial Advisors (September 19, 2017). 2018 Academic Research Colloquium for Financial Planning and Related Disciplines, Available at SSRN: https://ssrn.com/abstract=3039592

John Grable (Contact Author)

University of Georgia - Department of Housing & Consumer Economics ( email )

205 Dawson Hall
Athens, GA 30602-3622
United States

Amy Hubble

University of Georgia ( email )

Athens, GA 30602-6254
United States

Michelle Kruger

University of Georgia - College of Family and Consumer Sciences, Students ( email )

GA
United States

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