Research Paper Retail Financial Advice: Does One Size Fit All? Declared Winner of 2015 Canadian Investment Research Award

TORONTO, Feb. 23, 2015 /CNW/ - CFA Society Toronto and Hillsdale Investment Management are pleased to announce the winners of the 2015 Canadian Investment Research Award.  The award winning paper, Retail Financial Advice: Does One Size Fit All?, was submitted by Dr. Stephen Foerster, CFA (Ivey, Western), Dr. Juhani T. Linnainmaa (Booth, Chicago), Dr. Brian T. Melzer (Kellogg, Northwestern) and Dr. Alessandro Previtero (Ivey, Western).

The research paper was selected by a panel of judges from among 12 very competitive manuscripts submitted by academics from top business schools in the world as well as practitioners of leading investment firms in Canada.  

CFA Society Toronto and Hillsdale Investment Management will award a $10,000 prize to the winners on February 24, 2015 at CFA Society Toronto's annual Awards Reception.

"The genesis of the paper came from a mutual fund industry consultant who asked 'What would it take to get more academic research in the area of financial advice?' We simply replied 'Access to data.' So after a long process the consultant was able to help us secure data from some mutual fund firms that were interested in improving their best practices. We were able to create a rich database of Canadian advisors and their clients, and to compare some of the benefits and costs of financial advice." said Steve Foerster.

The abstract of the paper: "Using unique data on Canadian households, we assess the impact of financial advisors on their clients' portfolios. We find that advisors induce their clients to take more risk, thereby raising expected returns. On the other hand, we find limited evidence of customization: advisors direct clients into similar portfolios independent of their clients' risk preferences and stage in the life cycle."

"There is no doubt that advisors continue to play an influential role in providing investors with much needed financial advice and guidance.  A careful reading of this fine paper indicates that there are excellent advisors that do indeed generate alpha for their clients while helping them understand the need to take additional risk in order to earn additional returns." said Chris Guthrie, CFA, President and CEO, Hillsdale Investment Management Inc.

Established in 2011, the CFA Society Toronto and Hillsdale Canadian Investment Research Award is open to global researchers conducting research related to Canadian capital markets, including both academics (professors and students) and practitioners.  Submissions are judged on the potential contribution of their research to Canadian capital markets.  This prestigious award is offered annually to encourage high-quality research on investment management.

"At its roots, Hillsdale believes in and supports applied investment research.  We are so proud to be working with CFA Society Toronto on this award initiative and this year's winning paper clearly illustrates the high caliber of submissions." said Harry Marmer, CFA, Executive Vice President, Hillsdale Investment Management Inc.

To view a copy of the paper click here.

Note to editors:  The authors will give a brief overview of their findings at the February 24^th Awards Reception, at approximately 5:00pm.  The event is open to the media who can register by emailing [email protected].  Interviews are available upon request by emailing [email protected].  The Awards Reception will be held from 4:30pm - 6:30pm at KPMG, 333 Bay Street, Suite 4600, Toronto.           

About the Winners

Steve Foerster is a Professor of Finance at Ivey Business School, Western University. He received an HBA from Western University, a MA and PhD from the Wharton School, University of Pennsylvania and obtained the Chartered Financial Analyst designation. Steve has won numerous teaching awards, has written 100 cases and technical notes, and has over 40 publications including empirical studies in leading academic and practitioner-oriented publications. Steve is on the editorial board of Financial Analysts Journal. His most recent book is Financial Management: Concepts and Applications.

Juhani Linnainmaa is an Associate Professor of Finance at University of Chicago Booth School of Business. He received a PhD in management from the University of California in Los Angeles in 2006. Juhani studies investor behavior, asset pricing, and mutual fund performance. His published research includes "Do limit orders alter inferences about investor performance and behavior?" and "Reverse survivorship bias," which appeared in The Journal of Finance and "Do investors buy what they know? Product market choices and investment decisions," which appeared in The Review of Financial Studies.

Brian Melzer is an Assistant Professor in the Finance Department at Northwestern University's Kellogg School of Management. His research interests include household finance, financial institutions and financial regulation. His recent research focuses on the market for retail financial advice. He has also studied the default and investment behavior of heavily indebted homeowners and examined the impact of payday lending on household well-being. Brian received his PhD in economics from the University of Chicago Graduate School of Business in 2008. Prior to graduate study, he worked as a research analyst in the investment management business.

Alessandro Previtero is an Assistant Professor of Finance at the Ivey Business School, Western University. He joined Ivey in 2010 after being a Postdoctoral Fellow at the UCLA Anderson School.  Alessandro's research is in the field of behavioral finance, with special focus on consumer financial decision-making.  His work has been published in top-tier academic journals such as The Journal of Financial Economics and the Journal of Economic Perspectives. His research has also been covered by, among others, The New York Times, The Wall Street Journal, Money Magazine, The Globe and Mail, National Post, Montreal Gazette and MacLean's. He has been an Academic Board Member for the ING Institute for Retirement Research and one of the Academic Advisors for the National Employment Savings Trust (NEST).

About Hillsdale Investment Management

Founded in 1996, Hillsdale is an independent Canadian investment boutique, providing a full range of traditional equity and alternative investment strategies to both institutional and individual investors. Hillsdale manages a spectrum of long only, long/short and custom designed strategies employing a core investment style carefully implemented using an adaptive multi-strategy, risk controlled process.

About CFA Society Toronto

CFA Society Toronto supports the professional and business development of more than 8,300 CFA charterholders in Toronto, making it the second largest member society in the world. It provides members with a local perspective on a global designation, including: educational programs, sponsored events, job postings, quarterly newsletters, a comprehensive affinity program and networking opportunities. A not-for-profit organization, CFA Society Toronto is affiliated with CFA Institute, the global body that administers the Chartered Financial Analyst curriculum and sets voluntary, ethics-based performance-reporting standards for the investment industry. CFA Society Toronto's members are leaders in ethics in the financial community. For more information, please refer to www.cfatoronto.ca.

SOURCE CFA Society Toronto

CFA Society Toronto: Sara Pacella, 416.366.5755 X235, [email protected]