Top Financial Sector Trends

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  • http://www.worldpropertychannel.com/north-america-residential-news/home-foreclosure-trends-realtytrac-us-foreclosure-market-report-for-september-2012-foreclosure-filings-default-notices-scheduled-auctions-bank-repossessions-daren-blomquist-6168.php
  • https://www.iconoculture.com/SMART/Content/View.aspx?contentid=356172https://www.iconoculture.com/SMART/Content/View.aspx?contentid=353830
  • https://www.iconoculture.com/SMART/Content/View.aspx?contentid=354561https://www.iconoculture.com/SMART/Content/View.aspx?contentid=354323
  • https://www.iconoculture.com/SMART/Content/View.aspx?contentid=354937https://www.iconoculture.com/SMART/Content/View.aspx?contentid=356167http://www.consumerfed.org/news/593
  • http://hosted.ap.org/dynamic/stories/U/US_RETAIL_SALES?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT
  • https://www.wellsfargo.com/press/2012/20121023_MiddleClassRetirementSurveyhttp://money.cnn.com/2012/10/23/retirement/delaying-retirement/index.htmlhttps://iconoculture.com/SMART/Content/View.aspx?contentid=358755
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  • https://www.iconoculture.com/SMART/Content/View.aspx?contentid=354937https://www.iconoculture.com/SMART/Content/View.aspx?contentid=356167http://www.consumerfed.org/news/593

Transcript

  • 1. Monthly FinancialSector TrendsReportSeptember 1st, 2012 –September 30th, 2012 1
  • 2. Top FS Trends: U.S. Foreclosure activity lowers nationally, rises locally Based on RealtyTracs latest U.S. Foreclosure Market Report for September and the third quarter of 2012, foreclosure filings -- default notices, scheduled auctions and bank repossessions – decreased 7 percent from the previous month and down 16 percent from September 2011. Septembers total was the lowest U.S. total since July 2007. Despite the national decrease, Florida registered substantial increases in foreclosure activity in September, increasing 24 percent on a year-over-year basis, the 11th consecutive month with an annual increase, and the states foreclosure rate ranked highest nationwide for the first time since April 2005. With foreclosure rates increasing month-over-month in Florida, consumers are fatigued and frustrated when dealing with financial institutions. Implications: Complaints related to troubles encountered when borrowers were unable to make a payment. A significant number of consumers report big hassles when it comes to negotiating modifications or re-fis. Financial corporations may want to focus on humanizing their communication and explanations of regulations, and may assist in payment plans and strategies. Sources: Iconoculture, September, 2012 2
  • 3. Top FS Trends: Americans are optimistic on economy Americans report feeling increasingly optimistic about the economy, according to a new Citi Economic Pulse survey. When asked about their own finances as well as their local economics, most Americans report a greater sense of confidence about the future compared to last year. While Americans are still cutting back, the Citi Economic Pulse found that fewer report reducing their credit spending. Citi found that 76 percent of respondents feel a greater sense of control. In fact, Americans tend to be more optimistic about their own finances that those of the general economy. Frugality has become a status symbol, and although people self- report a tendency toward frugality, the average savings rate is still relatively low, around 4%. Implications: Americans may feel more optimistic and in control about their finances and the local economy, but their savings rates remain low. With only about 28% of Americans reporting having a financial planner, Financial corporations may find this to be an area of opportunity to promote their wealth management services to assist Americans in saving. Sources: Iconoculture, US News, September, 2012 3
  • 4. Top FS Trends: Cash-strapped Boomers have little left for leisure For most Boomers today, education and household expenses cover amount to most of their spending. Discretionary spending by consumers aged 45 to 64 has dropped dramatically, according to the National Center for Policy Analysis (AARP.org, 13 September 2012). Education expenses for Boomers and their families has ballooned 80%. Also up substantially: mortgage debt, utilities, insurance premiums, healthcare and support for adult children. According to a report by AARP, the lobby for people older than 50, three out of five families headed by a retiree over 65 had no retirement savings. Such statistics represent a group of people forever trying to make ends meet at a time when their health may be declining and their ability to do things not what it used to be. According to the Social Security Administration, 23% of married couples and 46% of single people receive 90% or more of their income from Social Security. Furthermore, 53% of married couples and 74% of unmarried people receive half of their income or more from the program. Implications: When it comes to properly managing their money and investments and saving for retirement in order to avoid financial hardships, seniors could gain from advice. Financial corporations can help by offering savings and management advice, notably related to mortgage debt and insurance. Sources: Iconoculture, New York Times, September, 2012 4
  • 5. Top FS Trends: Consumers admit to making financial mistakes In a Consumer Federation of America survey published in September 2012, a majority of US consumers confess that theyve made some serious financial blunders. 67% say theyve made painful economic mistakes, and the average cost has been a whopping $23,000. (The median cost was $5,000 per mistake). Despite those mistakes, though, most Americans rate themselves as "good" or "excellent" when it comes to financial decision- making (ConsumerFed.org, 18 September 2012). That paradox may speak to the challenging times. The survey also found that average assets among the middle had declined from $37,800 in 2007 to $27,300 by the end of the Great Recession. Its pretty hard to duck major mistakes that impact a familys net worth, but acknowledging them is the first step toward avoiding a repeat. As US consumers gain financial literacy, theyre likely to spend more smartly and save more aggressively. Implications: People have lost their appetite for risk. They’ve suffered through capital losses on their homes. And so theyre hunkering down in what they view as the safest place to store money. With consumers adverse to taking financial risks, it may be helpful to offer advice on those subjects. Financial corporations can offer tips on simple ways to avoid costly mistakes and promote management services already in place to be helpful here. Sources: Iconoculture, September, 2012 5
  • 6. Top FS Trends: Retail Sales Up 1.1% in September Retail sales rose 1.1 percent last month to a seasonally adjusted $412.9 billion, the Commerce Department said Monday. That followed a 1.2 percent increase in August, which was revised slightly higher. Both were the largest gains since October 2010. In September, retailers saw gains in almost every major category. That contrasted with Augusts retail sales, which rose almost entirely on the strength of auto sales and higher gas prices. Rising retail sales reflect a surge in consumer confidence that could help strengthen growth in the second half of the year. Consumer spending drives nearly 70 percent of economic activity. Despite weaker growth, consumers grew more confident in September. The Conference Board reported its confidence index rose last month to the highest reading since February. Of those, unemployment recently hit its lowest level in almost four years. Implications: As consumers begin to look more confident in spending across all retail categories, they will likely look for a financial institution to form a relationship with to reestablish their credit. Financial corporations may be able to relieve consumers concerns and reduce suspicion through clear and explicit customer explanations of customer service. Sources: Iconoculture, July, 2012 6
  • 7. Monthly FinancialSector TrendsReportOctober 1st, 2012 –October 31th, 2012 7
  • 8. Top FS Trends: Middle-class Americans teeter on edge of retirement cliff Half of middle class Americans (52%) say their most important day-to-day financial concern is paying the monthly bills, up from 37% a year ago according to the latest results from the annual Wells Fargo Retirement Survey. Saving for retirement is in second place with less than a fifth saying it is a key concern. Over half of pre-retired Americans say they are not confident they will have saved enough for the life they want in retirement, up from 42% percent in 2011. Almost half of middle class Americans without a written retirement plan say they haven’t planned for retirement because they are too focused on ―current financial obligations.‖ For people in their 50s, 54% say they are too focused on today to plan for the future. One third of Americans say they will need to ―work until at least 80,‖ in order to retire comfortably up from 25% a year ago, although it is unlikely employers would want them to work in their 80s. Implications: With Americans more concerned with covering their day-to-day finances, Financial corporations may offer counsel and provide tools and resources to educate consumers on best practices to manage their daily and monthly needs. Financial corporations can also introduce approaches for consumers to kick off saving for retirement. Sources: Iconoculture, Wells Fargo, October 2012 8
  • 9. Top FS Trends: Staying in debt helps finance Boomer retirements Loathe to give up their current lifestyles, increasing numbers of Boomers plan to carry debts into retirement, using credit to dodge bullets like unexpected healthcare costs. 80% of Boomers nearing retirement expect to remain in debt into retirement. Between 1992 and 2007, average debt in US households headed by 55+ consumers more than doubled to over $70,000, according to US government data. Retirees bold approach to debt could have consequences leaving their heirs with heavy burdens down the road, experts warn. Recession-battered Boomers are piecing together a future in which the "Ill just keep working" solution may not work in todays jobs market. Though savings are up post-recession, reaching for plastic is a habit thats tough to break. Implications: These retiring Boomers could gain from smart financial advisers to steer them in the right direction when it comes to properly managing their credit debt in order to avoid financial hardships. Financial corporations can help through financial advising services that relieves Boomers of the fear of unexpected healthcare costs or overburdening their beneficiaries with debt. Sources: Iconoculture, San Francisco Chronicle, October 2012 9
  • 10. Top FS Trends: Female Boomers are leerier than men about their financial future Boomers are still reeling from the Great Recession, which depleted their savings, devalued their homes and left many unemployed. But while men are beginning to regain their confidence, female Boomers continue to fret about the future, according to an AARP Public Policy Institute report. 60% of women born between 1946 and 1964 fear that they wont be able to afford a comfortable retirement Thats a sentiment shared by just over half (51%) of Boomer men. Women are less likely than men to receive income from pensions — and, when they do, they typically get less than men. The same goes for Social Security, leaving women more likely to require public assistance. Widows usually choose to receive spousal Social Security benefits instead of their own. Since women historically have been paid less into their pensions than men, they can expect to get less out. Implications: Boomer women have made clear their doubts about their financial future concerning retirement. It is important for Financial corporations to take into consideration the sensitivity of the topic in their communications. Financial corporations may focus on presenting solutions to assist this demographic in planning for a comfortable, albeit budgeted, retirement financed by Social Security and pensions. Sources: Iconoculture, AJC, October 2012 10
  • 11. Top FS Trends: Are Millennials the new face of frugality? Younger and older Millennials are being a bit more frugal with their income than older generations. The average percentage of income saved for Millennials is above the US average, and older Millennials not only are investing more of their income than the US average, but they also are investing more than any other generational cohort. By contrast, Gen Xers and Boomers are spending above the national average. These generations spend more of their income than the US average, while Millennials fall below the line. Millennials may have learned a thing or two from the Great Recession and are protecting their income rather than spending it. While this protective attitude could keep credit bubbles from bursting and nest eggs from breaking, it could be balanced with some discretionary spending to give the economy a little fuel to turn over its engine. Implications: It is no secret that many Millennials are more thrifty and less willing to indulge in commodities than older generations. Financial corporations’ communications aimed at this demographic should take into consideration and support these Millennials’ fiscal behaviors by offering investment options to protect and grow their savings. Sources: Iconoculture, September, 2012 11