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Wednesday, April 16
 

10:45am EDT

C2 Financial Decisions: Confidence, Information Sources, and Risk
Wednesday April 16, 2025 10:45am - 12:15pm EDT
Wednesday April 16, 2025 10:45am - 12:15pm EDT
Riverboat (William Penn Level)

10:45am EDT

C2a How Consumers Think About Investment Risk
Wednesday April 16, 2025 10:45am - 12:15pm EDT
Understanding financial risk is an integral part of making decisions about investing. Without adequate knowledge of financial risk, a consumer’s investment decisions may be based on misperceptions. Conversely, a sound understanding of financial risk may help consumers deploy risk-mitigation strategies, like diversification, and assess various investment products to identify those that align with their goals and risk tolerance._x000D_
To examine how consumers think about financial risk — as well as the relationships among risk comprehension, risk tolerance, and asset holdings — we fielded a survey to a nationally representative, probability-based sample. The survey gauged respondents’ financial risk comprehension, financial risk tolerance, asset holdings, recognition of risk-mitigation strategies, and specific risk-related investing concerns._x000D_
Results indicate that, while most consumers have a rudimentary understanding of investment risk, fewer are able to recognize risk-mitigation strategies. We find that those with higher risk comprehension tend to be more willing to take financial risk, and that investors and non-investors have different risk-related concerns about investing. We also find that investors’ risk comprehension and risk tolerance generally align with portfolio choices._x000D_
Findings suggest that consumers’ concerns about inflation and liquidity may be especially important for financial educators when beginning conversations about investment risk and how to manage it.
Wednesday April 16, 2025 10:45am - 12:15pm EDT
Riverboat (William Penn Level)

10:45am EDT

C2b Information Source Selection in Borrowing and Investment: A Multinomial Logit Analysis
Wednesday April 16, 2025 10:45am - 12:15pm EDT
Previous studies have demonstrated the benefits of using financial planners (Hanna, 2011, Elmerick et al., 2002; White & Heckman, 2016; Reiter & Qing, 2024). However, there are other sources that consumers use to obtain financial advice such as asking friends and family, using online services, calling around, or asking other non-financial planner professionals such as bankers and attorneys. Most studies have not examined the other sources of information that consumers use to seek financial advice. Therefore, this study mainly focuses on the specific service that consumers utilized including internet/online services, friend/relative, banker, call-around, and financial planner. To our best knowledge, little research has been conducted by comparing the specific help-seeking resources. In addition, to map out the decision differences between borrowing and investing, this study examined them separately. _x000D_
This study used the 2022 Survey of Consumer Finances (SCF) to examine the decision-making for borrowing and investing. Data from the SCF are widely used in financial planning and economic areas. For the 2022 wave of the survey, 4,595 households were interviewed. This study mainly focused on the most frequently used when making decisions about borrowing and investing; therefore, 3,807 observations were included for the estimation.
Wednesday April 16, 2025 10:45am - 12:15pm EDT
Riverboat (William Penn Level)

10:45am EDT

C2c The Role of Financial Confidence in Retirement Planning and Financial Satisfaction Among Asian Americans
Wednesday April 16, 2025 10:45am - 12:15pm EDT
This study examines the association between financial literacy confidence and financial satisfaction among Asian Americans using the 2021 National Financial Capability Study (NFCS) AAPI oversample. The findings emphasize the significant role of financial confidence—both overconfidence and underconfidence—in shaping retirement planning behaviors and overall financial satisfaction among Asian Americans. Underconfident individuals were less likely to engage in retirement planning and reported lower financial satisfaction. In contrast, overconfident individuals, despite not exhibiting more proactive retirement planning, reported higher levels of financial satisfaction. Mediation analysis further indicates that underconfidence leads to reduced retirement planning, which, in turn, results in lower financial satisfaction. The findings of this study suggest that financial professionals could benefit from helping underconfident individuals build their financial literacy and encourage proactive retirement planning, while also tempering overconfident individuals' decision-making to ensure they make informed, long-term financial choices. Additionally, promoting the value of retirement planning, particularly non-employer-sponsored accounts, could improve financial satisfaction.
Wednesday April 16, 2025 10:45am - 12:15pm EDT
Riverboat (William Penn Level)

12:15pm EDT

Mentor/Mentee Panel Discussion / Lunch
Wednesday April 16, 2025 12:15pm - 1:45pm EDT
Wednesday April 16, 2025 12:15pm - 1:45pm EDT
Riverboat (William Penn Level)

2:00pm EDT

D2 Investing Decisions: AI, Psychology, and Risk-Taking
Wednesday April 16, 2025 2:00pm - 3:30pm EDT
Wednesday April 16, 2025 2:00pm - 3:30pm EDT
Riverboat (William Penn Level)

2:00pm EDT

D2a Describing Household Risk-Taking During Times of Financial Crisis
Wednesday April 16, 2025 2:00pm - 3:30pm EDT
The aims of this study were to determine whether financial knowledge is related to risk-taking behavior after controlling for a financial decision-maker’s degree of risk aversion and risk tolerance and to identify the variables that are most important when describing the amount of portfolio risk taken at the household level. It was determined that financial knowledge is positively related to the amount of risk taken by financial decision-makers in their portfolios. Additionally, financial knowledge was found to be inversely related to risk aversion but positively associated with risk tolerance. It was further determined that risk tolerance has the greatest effect in describing portfolio risk. Financial knowledge ranked second in importance, whereas, risk aversion was the least important in describing portfolio risk.
Wednesday April 16, 2025 2:00pm - 3:30pm EDT
Riverboat (William Penn Level)

2:00pm EDT

D2b Enhancing Investment Decision-Making for Financial Consumers Using a Retrieval-Augmented Generation Large Language Model (RAG-LLM)
Wednesday April 16, 2025 2:00pm - 3:30pm EDT
This study develops and evaluates a Retrieval-Augmented Generation Large Language Model (RAG-LLM) system to enhance investment decision-making among financial consumers in South Korea. By integrating Large Language Models with Retrieval-Augmented Generation techniques, the system provides personalized, data-driven investment advice tailored to individual risk profiles inferred from demographic and financial characteristics. Utilizing publicly available financial data and consumer behavior literature, the model retrieves relevant information and generates recommendations regarding asset selections. The system's performance is assessed using portfolio metrics like expected returns, risk levels, Sharpe ratios, and utility based on constructed mean-variance optimal portfolios, and compared against naive random selection and traditional LLM-based systems. Preliminary results indicate that the RAG-LLM significantly outperforms baseline models, leading to higher Sharpe ratios and utility with reduced risk. This approach enhances financial decision-making, particularly benefiting financially marginalized groups who lack access to traditional advisory services. The research underscores the potential of AI-driven solutions in promoting financial inclusion, reducing disparities in investment outcomes, and contributing to a more equitable financial ecosystem.
Wednesday April 16, 2025 2:00pm - 3:30pm EDT
Riverboat (William Penn Level)

2:00pm EDT

D2c The Psychology of Investor Behavior: Stock Market Expectations and Portfolio Decisions During Market Volatility
Wednesday April 16, 2025 2:00pm - 3:30pm EDT
This study examines how personality traits and stock market expectations influence portfolio decisions among investors aged 50 and older during periods of market volatility. Using data from the 2018 and 2020 waves of the Health and Retirement Study, the research reveals associations between psychological characteristics and investment behavior during the COVID-19 market volatility. Drawing on the Meta-theoretic Model of Motivation and Personality, the study analyzes how elemental traits (Big Five personality characteristics) and compound traits (positive and negative affect) relate to stock market expectations and subsequent portfolio decisions. Results suggest that stock market expectations play a key role in connecting broader personality dispositions to investor behavior. The findings have important implications for financial practitioners, policymakers, and consumer advocates. Financial professionals can use these insights to identify clients who may be more prone to reactive decision-making during market uncertainty. Consumer protection policies can be enhanced by understanding which investors might be more vulnerable to potentially harmful portfolio adjustments. Additionally, the research informs how educational initiatives and financial technology can be tailored to support more effective consumer financial decision-making during periods of market volatility, particularly for older investors approaching or in retirement.
Wednesday April 16, 2025 2:00pm - 3:30pm EDT
Riverboat (William Penn Level)

3:45pm EDT

E2 Wealth Transfers: Generosity, Legacy, and Demographics
Wednesday April 16, 2025 3:45pm - 5:15pm EDT
Wednesday April 16, 2025 3:45pm - 5:15pm EDT
Riverboat (William Penn Level)

3:45pm EDT

E2a How Generosity Affects Consumer Well-Being: The Mediating Role of Trust
Wednesday April 16, 2025 3:45pm - 5:15pm EDT
This study aims to explain why charitable giving and volunteering enhance consumer well-being, with a particular focus on the role of trust. We conducted a mediation analysis using Hayes’ Process Macro Model 4 to examine the indirect effects of generosity, including charitable giving and volunteering, on the Satisfaction with Life Scale (SWLS) through trust. The results confirmed that all the hypotheses were supported, demonstrating that charitable giving and volunteer work enhance consumer well-being through the mediation of social trust. That is, the benefits derived from these altruistic actions contribute to social trust, making them valuable for consumer well-being. Engaging in these activities can lead to a richer, more meaningful life. Based on the results, several policy and educational recommendations and suggestions for follow-up studies were made.
Wednesday April 16, 2025 3:45pm - 5:15pm EDT
Riverboat (William Penn Level)

3:45pm EDT

E2b Leaving a Legacy: The Role of Charitable Giving in Bequest Expectations
Wednesday April 16, 2025 3:45pm - 5:15pm EDT
This study examines the role of charitable giving, both time and money, in bequest motivation. Andreoni (1990) combined the public goods model and the private consumption model to uncover that an individual’s utility may not only come from increasing public goods but also from the act of giving. Monetary contributions are a way of distributing wealth. Alternatively, the price of volunteering, the shadow value of time, depends on the opportunity cost. To investigate whether charitable giving may crowd out the bequest expectation, this study utilized the Survey of Consumer Finances (SCF) through the logistic model to demonstrate the association between charitable giving and bequest expectation. The results indicate that households without any charitable behavior are less likely to expect to leave sizable estates than those who only engage in volunteer activities. Also, compared with households that only participate in volunteer activities, those who only make financial contributions are less likely to expect to leave a substantial estate. To evaluate the magnitude of the difference between volunteer activities and monetary contributions, this study also utilized the interactions to support our results.
Wednesday April 16, 2025 3:45pm - 5:15pm EDT
Riverboat (William Penn Level)

3:45pm EDT

E2c The Future of Wealth Transfer: How Demographics Shape Inheritance Expectations in America
Wednesday April 16, 2025 3:45pm - 5:15pm EDT
The Great Wealth Transfer, projected to continue until 2045, represents a significant shift in wealth across generations in the United States. This study utilizes data from the 2021 National Financial Capability Study (NFCS) to investigate the demographics of individuals expecting an inheritance. Our findings reveal that about 31% of respondents expect to receive an inheritance of $10,000 or more, primarily among those aged 25-44.  Women, white respondents, and individuals with higher educational attainment are strong predictors to expect an inheritance. Additionally, respondents with higher income levels and greater risk tolerance have higher odds of expecting inheritance. These results suggest wealth transfers predominantly occur in financially affluent families, often characterized by educational advantages and familial obligations. However, the study's implications suggest further research to explore the demographics of those inheriting larger financial amounts, providing a more comprehensive understanding of inheritance expectations._x000D_
 
Wednesday April 16, 2025 3:45pm - 5:15pm EDT
Riverboat (William Penn Level)
 
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