A Stanford study reveals one thing that makes older adults much more susceptible to financial scams

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A Stanford study reveals one thing that makes older adults much more susceptible to financial scams (Stanford)

A new lab experiment designed to simulate the “real-world tactics of financial fraud perpetrators” from the Stanford Center on Longevity found that “inducing high-arousal positive or high-arousal negative emotions in older adults increased their desire to purchase products after viewing misleading advertisements.”

Perhaps surprisingly, those who had been exposed to high-arousal emotional stimuli inducing excitement or anger reported that they did not find the advertisements to be more credible than those who had been treated to feel low-arousal, more neutral emotional states, even though the highly aroused subjects were more likely to express a desire to buy risky products.

“When emotionally aroused, either excited or frustrated, older adults may be more susceptible to being victimized by scammers than are younger individuals,” said Ian H. Gotlib, the David Starr Jordan Professor of Psychology and chair of the Stanford Psychology Department.

The study suggests that communicating this information to consumers and investors — especially older ones — could help them avoid being victims of fraud.

Figuring out how often to rebalance a portfolio isn’t as easy as it seems (Nerd’s Eye View)

Everyone knows that it’s important to sometimes rebalance your portfolio in order to make sure that make sure the overall risk of the portfolio doesn’t get too high. However, it’s not totally obvious to most people how often the portfolio needs to be rebalanced, observes Michael Kitces.

“The conventional wisdom is to rebalance a portfolio at least once per year, and possibly even more frequently, such as quarterly or monthly,” notes Kitces. However, other research “suggests a superior rebalancing methodology is to allow portfolio allocations to drift slightly, and trigger a rebalancing trade only if a target threshold is reached.”

Some of the good signs coming out of China might just be a temporary thing (Advisor Perspectives)

There have been some good things coming out of China in March: industrial production rose 7% year-over-year, capital investment rose nearly 11% year-over-year, and credit financing jumped to $271 billion from $182 billion in February.

“I expect positive data continue to flow in for month or two as steel restocking, additional quasi-fiscal stimulus and seasonal data distortions continue to impact China’s economic cycle. … But the ‘green shoots’ we see in the Chinese economy are not likely to persist and I expect softness to resume in June or July,” argues Aimee Kaye of Loomis Sayles.

LPL is moving in on high-net-worth individuals (FA magazine)

LPL Financial wants to expand its high-net-worth offerings for people with $5 million or more to invest, reports Tom Kostigen.

The firm announced a new education series, the Private Client Curriculum Series, which is designed to help financial advisors and institutions “market to, win and retain HNW individuals and institutional clients.”

MetLife’s looking at a record Finra fine after misleading annuity customers (Bloomberg)

Bloomberg’s Katherine Chiglinsky reports that MetLife Inc. will pay $25 million to “to settle a probe of abuses tied to variable annuities.” That’s the the highest penalty ever for those products by Finra.

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