Do contracts influence comprehensive financial advice?

Authors

  • Michael Finke Division of Personal Financial Planning, Texas Tech University
  • Sandra Huston Division of Personal Financial Planning, Texas Tech University
  • William Waller Division of Personal Financial Planning, Texas Tech University

DOI:

https://doi.org/10.61190/fsr.v18i2.4943

Keywords:

Life insurance, Agency theory, Financial planning, Financial advice

Abstract

Delegating management of financial decisions may involve both direct and agency costs. We hypothesize that contracting differences between financial planners and brokers may lead to differ­ ences in life insurance adequacy. Using nationally representative data, we estimate the impact of the use of planners and brokers on life insurance adequacy. Descriptive and multivariate analyses of insurance adequacy are consistent with the hypothesis that contracting matters. Those who rely primarily on financial planners are more likely to have adequate life insurance holdings. The use of brokers is not related to optimal levels of life insurance.

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Published

2009-06-30

Issue

Vol. 18 No. 2 (2009): FSR Summer 2009

Section

New Original Submission

License

Copyright (c) 2009 Academy of Financial Services

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This license allows the author to remix, tweak, and build upon the original work non-commercially. The new work(s) must be non-commercial and acknowledge the original work.

How to Cite

Do contracts influence comprehensive financial advice?. (2009). Financial Services Review, 18(2), 177-193. https://doi.org/10.61190/fsr.v18i2.4943