From the Editor

This issue contains Volume 27 - Issue 1 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 “Credit Usage, Payment Behavior and the Accuracy of Consumer Credit
Files” is authored by L. Douglas Smith at University of Missouri-St. Louis, Michael Staten
at University of Arizona, Thomas Eyssell at University of Missouri-St. Louis, Maureen
Karig at University of Missouri-St. Louis, Jeffrey Feinstein at LexisNexis Risk Solutions,
and Cathleen Johnson at University of Arizona. In this research, the authors conduct
interviews, examine credit reports, and rescore corrected credit files, to consider household
characteristics, major life events, financial resources, and payment habits in order to study the
integrity of credit-bureau data, vulnerability to error, and results of disputes filed with the
major credit bureaus. They find that credit usage and management vary widely within
demographic groups. They conclude that consumers with moderate credit scores are more
likely than those with very high or low scores to see significant improvement in their records
when errors are corrected.

The second article “Age When First Employed and Retirement Wealth of Baby Boomers”
is coauthored by Hyungsoo Kim at University of Kentucky, Serah Shin at University of
Kentucky, Qun Zhang at University of Kentucky, and Martie Gillen at University of Florida.
The authors examine how age when first employed is related to retirement savings in later
years. Using data from the Health and Retirement Study, they investigate two specific
questions: Has age when first employed affected the retirement wealth of baby boomers? If
so, to what extent? Their results show that age when first employed is negatively associated
with accumulated retirement wealth in later years. For college graduates delaying the start of
employment cost approximately $35,103 per year in retirement savings after controlling for
demographic characteristics, number of working years, and occupation types.

The third article, “Conflicted Advice About Portfolio Diversification” is coauthored by
Sally Shen at Global Risk Institute in Financial Services and John A. Turner at Pension
Policy Center. The authors investigate the validity of the argument by the financial services
industry to “roll over your ‘old’ 401(k) plan” because 401(k)-type plans have a limited
number of investment options, while IRAs have a virtually unlimited number of options.

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They analyze the diversification of a large 401(k)-type plan with only five basic investment
options. They find that financial advisers with a conflict of interest may use strategic
complexity to encourage rollovers, recommend complex portfolios to impress naı̈ve clients,
while not weighing the cost of the complex portfolios against any added benefits of
diversification.

The fourth article, “The Role of Perceived Quality of Personal Service in Influencing Trust
and Satisfaction with Banks” is coauthored by Anders Carlander, Amelie Gamble, Tommy
Gärling, Jeanette Carlsson Hauff, Lars-Olof Johansson, and Martin Holmen, all at University
of Gothenburg. The authors investigate if trust in banks increases with repeated personal
contacts with respect to the customer-employee relationship. They utilize data from an
on-line survey of customers of Swedish retail banks and find that trust in the bank is
influenced by perceived quality of personal service through employees’ perceived compe-
tence, perceived benevolence, and perceived transparency. They also find that satisfaction
with the bank is influenced by perceived quality of personal service through perceived
competence, perceived benevolence, and perceived transparency.

The final article, “Expense Ratios and Net Alphas of Large Cap Funds: Do Expenses Add
Value?” is coauthored by Abhay Kaushik and Raymond Boisvert, both at Radford Univer-
sity. The authors analyze the performance of large cap equity funds over the period January
2000 to December 2103 (a particularly tumultuous period), with the objective to assess the
performance as reflected in the alpha of funds conditioned on expenses. The results are mixed
for large cap funds across individual categories and when performance is measured condi-
tioned on expenses.

Thanks to those who make the journal possible, especially the referees and contributing
authors. Over the past year, the following reviewers provided excellent reviews of the articles
you enjoyed within the pages of Financial Services Review. 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.

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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