“Purchase a Time-Share Interval or Rent Hotel Rooms? Preparing for a Discussion with Clients,” by Stephen J. Larson, PhD, CFP and Robert B. Larson, JD, took first place in the techniques category. The paper focuses on providing financial planners with the information they need to have time-share ownership discussions with their clients, comparing the pros and cons of time-share interval ownership with renting vacation units, including risks, cash flows and legal issues associated with each. Although this is a common discussion topic among planners and their clients, the FPA and Janus noted in making the announcement that is the first formal literature on this topic presented to the financial planning community.
Stephen Larson is an associate professor of finance at Ramapo College of New Jersey and conducts research on personal finance, market overreaction and government contracts. Robert Larson graduated from the Hamline University School of Law in May 2009 and his research includes legal aspects of personal finance, estate planning for non-traditional couples, and government contracts.
The winning paper in the concepts category, “Constructing Core Portfolios for Chaotic Markets” by Paul D. Tomasula Jr., CLU, ChFC, proposes constructing portfolios using the full range of historical market movements. Typically, financial planning software based on Modern Portfolio Theory or Monte Carlo simulation groups the probabilities of market moves under the normal Gaussian distribution, or bell-shaped curve. In his paper, Tomasula, who is the principal of Ca pital Planners, Inc. in Bartlett, Illinois, recommends using software that uses the Cauchy-Lorentz distribution rather than the typical Gaussian distribution. He states in his paper although planners may have to sacrifice their favorite theories on how markets move, constructing robust portfolios may be simpler than trying to understand the markets.
Each research paper submitted for the Financial Frontiers Awards is evaluated by a panel of highly qualified judges assembled by FPA’s Journal of Financial Planning from a pool of FPA members.
The 2009 Financial Frontiers Awards winners will present their papers on Tuesday, October 13 at FPA Anaheim 2009, the association’s annual conference. More details on the published papers will be available in the November and December issues of the Journal of Financial Planning.
The Financial Frontiers Awards program began in 2005 to promote research that increases knowledge and advances the financial planning profession. The Awards are open to all financial planners, advisers, management and support staff at financial services institutions, regardless of the organization’s size.
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