From the Editor

This issue contains Issue 1 of Volume 24 of Financial Services Review (FSR). I would
like to thank the board and members of the Academy of Financial Services for their
continued support. I continue to work in broadening the scope of articles, while still focusing
on individual financial management and personal financial planning. I encourage authors to
reach out when discussing implications of their findings in a more comprehensive way. As
such, all articles in the Journal more appropriately relate to financial planning issues.

The lead article “Gender Differences in Saving Behaviors among Low- to Moderate-
Income Households” is coauthored by Patti J. Fisher at Virginia Tech, Celia R. Hayhoe at
Virginia Tech, and Jean M. Lown at Utah State University. In this paper, the authors explore
gender differences in saving behaviors among low- to moderate-income households using
data collected online from a national sample of low- to moderate-income households and
data on similar income single households from the 2010 Survey of Consumer Finances. Their
results indicate that saving behaviors differ by gender. They find gender differences in the
effects of high risk tolerance and being non-white on the likelihood of being a saver. They
also find that the presence of other household members affects savings differently for women
and men. They recommend that counselors encourage savings among men and women in
low- to moderate-income households as a way to reduce financial risk and ensure financial
security.

The second article “Spread Options and Risk Management: Lognormal Versus Normal
Distribution Approach” is coauthored by Robert Brooks at The University of Alabama and
Brandon N. Cline at Mississippi State University. The authors provide tools for managing the
downside risk related to the spread between the asset portfolio and corresponding liabilities
for individual investors. They investigate the spread option valuation model where both
underlying instruments follow geometric Brownian motion, and one where both underlying
instruments are assumed to follow arithmetic Brownian motion. They show that the risk
parameters are often materially different. For most personal financial planning applications,
one can safely use the simpler arithmetic Brownian motion model.

The third article, ”Minority household size and the life insurance purchase decision “ is
coauthored by Michael A. Guillemette at the University of Missouri, M. Monica Hussein at
California State University, Northridge, and G. Michael Phillips at California State Univer-
sity, Northridge. The authors use the 1992-2010 Survey of Consumer Finances to analyze
whether the likelihood of life insurance ownership and the face value amount of life
insurance changes for minorities as household size changes. They find that the likelihood of

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life insurance ownership declines for black and larger Hispanic families as household size
increases when controlling for socioeconomic and demographic variables. They also find a
significant decline in the face value amount of term life insurance purchased by black
families as household size rises. They recommend that financial planners recognize potential
cultural biases and the possible role of household members when meeting with their clients
to discuss life insurance coverage.

The fourth article, “Home Ownership Decision in Personal Finance: Some Empirical
Evidence” Is coauthored by C. Sherman Cheung and Peter Miu both at McMaster University.
In this paper, the authors examine the home ownership question for households with
differing risk tolerance and demonstrate the interaction effect between financial assets and
home ownership. They also examine whether the economic case for home ownership varies
across U.S. regions. For households that decide to rent instead of own, the authors recom-
mend hedging housing consumption risk with investments in real estate investment trusts.

The final article, “Do Financial Networks Matter in Retirement Investment Decisions?
Evidence from Generation Yers” is coauthored by Yunhyung Chung and Youngkyun Park
both at the University of Idaho. The authors use experimental survey data collected from a
sample of Generation Yers to examine the joint influence of financial literacy and financial
networks on individual retirement investment decisions. They find that financial literacy and
financial network intensity are positively related to stock allocation. They also show that the
positive relationship between financial literacy and stock allocation is significant only among
those having high financial network intensity.

I would like to send a special thank you to the many reviewers that have significantly
contributed to the quality of our journal by providing timely and thorough reviews of the
submissions to our journal. Thanks to those who make the journal possible, especially the
referees and contributing authors.

Please consider submission to the Financial Services Review and rely on the style
information provided to ease readability and streamline the review process. The Journal
welcomes articles over the range of areas that comprise personal financial planning. While
FSR articles are certainly diverse in terms of topic, data, and method, they are focused in
terms of motivation. FSR exists to produce research that addresses issues that matter to
individuals. I remain committed to the goal of making Financial Services Review the best
academic journal in individual financial management and personal financial planning.

Best regards,
Stuart Michelson

Editor Financial Services Review

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