From the Editor

This issue contains Issue 2 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 “Financial Literacy and Financial Behavior: Assessing Knowledge and
Confidence,” is authored by Colleen Tokar Asaad at St. Bonaventure University. In this
paper the author explores how financial literacy, comprised of both actual financial knowl-
edge and perceived financial confidence, affect financial decisions. Her results indicate that
financial confidence is a critical component of financial literacy and is important across all
knowledge levels. She also shows that overconfident individuals or those with high self-
assessed knowledge, but low actual knowledge, have a higher propensity to engage in risky
financial behaviors.

The second article “Financial Knowledge Acquisition Among the Young: The Role of
Financial Education, Financial Experience, and Parents’ Financial Experience,” is coau-
thored by Ning Tang and Paula C. Peter, both at San Diego State University. The authors
explore how financial education, financial experience, and parents’ financial experience
influence young adults’ financial knowledge. Using data on 3,597 young adults from a
national longitudinal survey, they find that financial education, financial experience, and
parents’ financial experience all exert a positive impact on young adults’ financial knowl-
edge. They also find that these determinants work interactively and that both individual and
parents’ financial experience help narrow the gap in financial knowledge caused by lack of
financial education.

The third article, Do U.S. households perceive their retirement preparedness realisti-
cally?,” is coauthored by Kyoung Tae Kim at University of Alabama and Sherman D. Hanna
at the Ohio State University. In this paper, the authors examine the divergence between
objective and subjective assessment of retirement adequacy, analyzing U.S. households with
a full-time worker age 35 to 60 in the 2010 Survey of Consumer Finances. They find that of
those households, 58% have objective inadequacy, and 54% have subjective inadequacy, but
only 52% have objective/subjective consistency. Using a logistic regression, they show that
households with defined benefit plans and with defined contribution plans are less realistic
than those without plans, and, as age increases, realism decreases.

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The fourth article, “Investment Performance of AAII Stock Screens over Diverse Mar-
kets,” is coauthored by David S. North and Jerry L. Stevens, both at University of Richmond.
In this paper, the authors extend prior research on AAII screening performance by including
more recent investment periods, employing more rigorous factor models, and examining both
median and mean returns to address possible skewness. They show that over a period of
tumultuous markets, with as little as $50,000 to invest, over 30% of the available screens
achieved statistically significant excess rates of return unrelated to transaction costs and
multi-factor risks proposed by efficient market theorists. These results should assist individ-
ual investors who often rely on information services and products when making their
investment decisions.

The final article, “The Grable and Lytton Risk-Tolerance Scale: A 15-Year Retrospec-
tive,” is coauthored by Stephen Kuzniak, Abed Rabbani, Wookjae Heo, Jorge Ruiz-Menji-
var, and John E. Grable, all at University of Georgia. The authors follow up on the Financial
Risk Tolerance Scale developed by Grable and Lytton which was originally published in
Financial Services Review in 1999. Over that last 15 years this scale has been widely used
by consumers, financial advisers, and researchers to evaluate a person’s willingness to
engage in a risky financial behavior. Their data analysis (n � 160,279) spanning the
timeframe 2007 to 2013 provide supporting evidence that the risk-tolerance scale’s reliability
and validity have remained robust since the scale was first developed. They found that
consistent with the literature, high scale scores, representing a greater willingness to take
risks, were found to be associated with equity ownership and negatively related to cash and
bond holdings.

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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