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Current Issue of the Journal

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Welcome to the Spring 2018 issue of the Journal of Personal Finance. We are excited to bring you another six articles representing cutting edge research and current thinking in the field of personal finance. We also wish to announce that this is the last issue of the Journal of Personal Finance that we will be editing. The journal will be left in good hands, though, as we are happy to announce that Benjamin Cummings, Ph.D., CFP®, RFC® will serve as the journal’s next editor. Dr. Cummings serves as an Associate Professor of Behavioral Finance at The American College of Financial Services. He earned his Ph.D. from the Personal Financial Planning program at Texas Tech University, and his areas of focus include charitable giving, education planning, estate and tax planning, life insurance, portfolio management, and retirement planning. We have enjoyed our time at the journal and are grateful for the opportunity to be actively involved in guiding one of the key journals in the field of financial planning and personal finance.


Volume 17 Issue 1,  2018

Recognizing Conflicts of Interest in Financial Planning: A Sequential Study  ………………………………...9

Frank C. Bearden, Ph.D., Managing Member, Frank C. Bearden LLC.


Conflicts of interest (COI) are an important issue for financial planners. This study is sequential to a prior study, providing improved sample uniformity and focus. The emphasis is upon measuring the recognition of COI by CFP® certificants in financial planning practice. Recognition was measured in six pending financial planning engagements. Participants were 134 CFP® certificants in financial planning practice. To measure recognition of COI
in each engagement, participants were asked the likelihood the financial planner would encounter a COI by accepting each engagement. Participant recognition of COI aligned with expectations in 4 of the 6 engagements, but did not align when considering a family member or business associate as a client. Time in financial planning practice and number of professional designations were measured as possible influence factors on the planner’s recognition of COI, and found to have insignificant influence.

Do Interest-Only Mortgages Really Make Sense for Investors?……………………………………21

Vance P. Lesseig, Associate Professor of Finance, McCoy College of Business Administration, Texas State University
Kenneth P. Moon, Associate Professor of Finance, McCoy College of Business Administration, Texas State University


Interest-only mortgages began as a way for well-qualified borrowers to reduce their monthly mortgage payment and increase their available funds for investment. However, during the financial crisis, these loans were viewed as one of the factors precipitating the mortgage problems as borrowers had instead used them as a way to qualify for larger loans. While this paper will not debate the merits of how interest-only mortgages are used, we will try to determine if their original intent is reasonable. This paper attempts to analyze how easily an investor can earn returns that “beat” mortgage rates. Specifically, we use portfolio return simulations with the historical return characteristics of various assets and mortgage rates to determine the probability of various “typical” investment portfolios earning returns that exceed mortgage interest rates. Not surprisingly, our results show that the probability of successfully employing this strategy is often less than 15 percent, and increasing the probability of success requires large increases in risk.

Why Financial Advisors Have Yet to Leave the Professionalism Bar…………………………………………33

Jeffrey M. Camarda, PhD, CFA, EA, Camarda Wealth Advisory Group

The Charitable Bequest Gap Among African-Americans: Exploring Charitable, Religious, and Family Estate
Planning Attitudes………………………………….43

Jennifer Lehman, J.D., Ph.D. Candidate, Texas Tech University
Russell N. James III, J.D., Ph.D., CFP®, Professor, Texas Tech University


Previous research reports that African-Americans are significantly less likely than Whites to have a charitable estate plan, even when controlling for other socio-economic characteristics. Two possible explanations are a documentation barrier or lack of charitable intent. Evidence for a documentation barrier includes relatively lower engagement with the formal financial system in general. The evidence further indicates that, among those who have estate planning documents, African-Americans are not less likely to include a charitable component. Using nationally representative data from the 2007 Panel Study of Income Dynamics (n=8,289), we present direct evidence of attitudes regarding charitable, religious, and family estate planning. In absolute terms, African-Americans rated the importance of charitable and religious bequest gifts higher than others did. This suggests a documentation barrier—a barrier that advisors can actively address–rather than a lack of charitable intent. Additionally,consistent with theories and findings in current charitable giving, African-Americans were also more likely to give religious bequests greater importance relative to other charitable or family bequests.

Personal Finance Bloggers…………………………………………57

David Donovan, David Donovan Consulting, Upper Coomera, Queensland, Australia


‘Personal finance bloggers’ give personal, and in some cases blended small business and personal, financial advice of varying types. Much of the content on these sites is written by individuals who are not financial professionals. This article reviews a selection of ‘Personal finance bloggers’ and assesses the background and motivation of the operators, the size of the operation, the quality of investment and retirement planning advice when compared to generally accepted financial planning approaches, and assesses the threat these sources of financial advice pose to traditional financial advice providers.

The Behaviorally-Enlightened Fiduciary: Addressing Moral Dilemmas through a Decision-Theoretic Model
of Moral Value Judgment..…………………………………………69

Derek Tharp, Ph.D., Kansas State University



A fiduciary has an ethical obligation to act in the best interests of her client. In this paper, I argue that this obligation demands that a fiduciary advise her client from a behaviorally-informed perspective. However, this obligation creates new moral dilemmas, complicating ex-ante determination and ex-post evaluation of the fulfillment of fiduciary duties. I argue that a prima facie duty of disclosure may only be overridden when the potential upside of the non-disclosed option to the beneficiary is small, the potential downside of the non-disclosed option to the beneficiary is large, and the fiduciary is epistemically justified in her beliefs regarding the potential outcomes. I present a decision-theoretic model for evaluating these dilemmas, as well as practical guidance for fiduciaries facing these trade-offs.


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