This study investigates the financial attributes, financial behaviors, financialadvisor-use beliefs, and investing characteristics associated with having used an automated investment solution (i.e., a robo-advisor). Data are used from the 2015 National Financial Capability Study (both the State-by-State Survey and the Investor Survey) to investigate the use of robo-advisors among 1,393 individuals with non-retirement investment accounts. Multivariable results indicated that being younger, having low or midrange income, and having lower objective investment-knowledge scores was positively associated with robo-advisor use. This study provides important insight for policymakers, financial practitioners, and proprietors of robo-advisors and other fintech products.
Funding higher education is among the critical financial decisions made by individuals and families. There are myriad options. Yet, the conventional wisdom—namely using Section 529 Plans—may not be the optimal vehicle to effectuate this goal. Therefore, this Article discusses various strategies to plan, save, and pay for higher education. It compares various savings methods including gifts, UTMA accounts, Section 529 Plans, trusts, and other vehicles. The analysis explores both tax and non-tax considerations, including the effect of different strategies on financial aid, transaction costs, investor control, income taxes, gift and estate taxes, flexibility, and creditor protection. This Article concludes that the ubiquitous Section 529 Plan may not be as effective as conventional wisdom suggests. Indeed, we argue that Section 529 Plans are optimal only when capital can be exclusively committed to education funding, which may not be the most desirable savings tactic for a wide swath of American families who need to plan for other financial needs (e.g., retirement and unforeseen medical needs).
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