Financial planning and household portfolio performance: evidence from the 1998-2013 survey of consumer finances

Abstract

This dissertation used datasets from the 1998, 2001, 2004, 2007, 2010 and 2013 Survey of Consumer Finances (SCF) to evaluate the effect of using financial planning services on households' portfolio performance. In this dissertation, portfolio performance was measured by portfolio Sharpe Ratio. Financial planning services were considered to be the professional services provided by lawyers, accountant and financial planners in this dissertation. After controlling other factors, the findings lend empirical support to the belief that financial planning service delivered by professionals benefit households in higher possibility of reaching better portfolio performance. This lends empirical support to claims that professional financial planning services provide value to clients. Implications for individual investors, financial planning professionals, and future research are discussed.