March 18, 2010
UI creates Iowa Center for Wealth Management to help Iowans become money savvy
More and more surveys show that fewer and fewer Americans have the financial and economic knowledge to make wise money management decisions, especially when it comes to funding their retirement.
A new center in the University of Iowa's Tippie College of Business hopes to help fix that problem. The Iowa Center for Wealth Management is an online resource that provides unbiased financial education, guidance and advice as a free public service.
"The need for financial knowledge has become critical as many employers have eliminated traditional pension plans, putting the responsibility on workers to prepare for their own retirement," says John Spitzer, a finance professor and center co-director. Many analysts believe workers are unprepared for their financial future, putting them at significant risk and Spitzer notes that both Presidents George W. Bush and Barack Obama have called for greater emphasis on improving American's financial comprehension.
The center, found online at http://www.biz.uiowa.edu/wmc/, provides detailed but easy to understand answers geared toward the beginning investor, including such questions as: What is a 401k? How do I determine how much insurance I need? Is a Roth IRA or Traditional IRA a better investment vehicle?
The center's two directors bring a wide range of financial knowledge and experience. Spitzer, a clinical professor of finance, is a former senior economist at the Federal Reserve and was a vice president of the Federal Home Bank of San Francisco before joining the UI in 1995. Co-director Todd Houge is an expert on finance, markets and investments. He is also the academic advisor for the award-winning Henry Fund. During the 10 years Houge has been guiding the Henry Fund, it has posted an average 5.17 percent annual return, substantially above the 1.84 percent annual return for the S&P 500 index.
The heart of the Web site is a "Basic Principles" module that Spitzer said is "the book we would have written, had not the Web offered easier access. We have put links among the subjects so readers can skip through it according to their interests." The module contains the basic principles as well as sections titled "our view," which give the professor's views on how those principles are best applied.
The Web site also provides a retirement calculator spreadsheet.
Spitzer and Houge plan to build a section containing short articles on current topics and also a Q&A section, where they will answer questions sent to them.
Spitzer and Houge said there are two major aspects that set the center apart from other similar Web sites. First, the information and views provided by the center are drawn from the knowledge base at the Tippie College of Business at the UI. Second, the center has no conflicts of interest relating to any financial services company or its products.
"People do not have to worry about us having a hidden agenda," Houge said.
While the center focuses on the beginning investor, the aim is to provide details that are sufficient to cover each topic. Houge noted that some of the other sources of information provide shorter answers to financial questions.
"Unfortunately, while they might be shorter reads, those answers are sometimes so condensed they do not offer complete information, often to the point where they are misleading or wrong," Houge said.
The center also has a community outreach component, with Spitzer and Houge visiting community groups and other organizations to present programs about financial literacy and answer questions.
STORY SOURCE: University of Iowa News Service, 300 Plaza Centre One, Iowa City, Iowa 52242-2500