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| August 2, 2010 |
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Consumer Trends
The Great Recession: Most Americans Still Feeling the Effects
Most Americans have suffered the effects of the recession at work, at home, and in their plans for the future.
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The majority of those surveyed (55%) have been affected by one or more of a broad range of work-related impacts, from unemployment and pay reductions, to an involuntary cutback to part-time work.
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Most (62%) said they have cut back on spending since the recession began and about half (48%) claim to be in worse financial shape now than when the recession began.
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Many Americans (54%) believe that the country is still in a recession, although 62% think their personal finances will improve in the coming year.
The full report is available on the Pew Research Center's Web site.
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Financial Planning
Investors Still Seek Help From "Traditional" Pros
Investors were clearly rattled by recent crises in the financial world, yet they still prefer to get financial advice from traditional professionals rather than online resources.
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On a five-point scale of reliability, 62% of survey respondents gave CPAs either four or five points. Banks were determined to be the next "most reliable" (52%), followed by financial advisors (51%).
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The "most influential" sources of financial advice were financial advisors (23%), banks (17%), and CPAs (15%). Only 4% of respondents awarded that distinction to online forums.
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Young people, however, are more likely to turn to the Internet: 43% of adults under the age of 30 use online forums, and 48% say Google is their most influential financial advisor. By contrast, only 10% of those over age 65 rely on online forums and just 6% say Google is their most influential source of advice.
More information is available on the Capstrat Web site.
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Financial Professionals
Advisors Spend Half of Their Work Week Online
The typical advisor now spends 23 hours per week online at industry, social, and asset manager sites.
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A large majority (71%) say their product decisions are influenced by the quality of the asset manager sites that they visit.
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Mobile devices have become important work tools, with 54% of advisors using them to access work-related information outside of email.
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Advisors receive an average of eight emails per day from asset managers and complain that too many of those emails are neither personalized nor targeted.
The full study can be purchased from the kasina Web site.
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High Net Worth
Family Issues Complicate Finances
When wealthy parents were asked about the most important life lessons they could teach their children, half said financial know-how, on par with the percentage who said maintaining a close relationship with family.
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Among wealthy families who worked with a financial advisor, 74% had shared with their children advice received from the advisor, including managing a budget (42%) and investing for retirement early in life (32%).
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The majority of high-net-worth families (70%) did not believe their retirement plans adequately considered the potential for unexpected family events such as a serious illness or divorce, yet 35% admitted to adjusting their finances because of such a situation.
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Approximately half of affluent couples disagreed about financial matters, including budgeting (45%), purchasing luxury items such as cars and boats (33%), and debt management.
A summary of the findings is available on the Bank of America Web site.
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Quote of the Week
Lyle LaMothe, Head of U.S. Wealth Management for Merrill Lynch Wealth Management, on the Changing Roles of Financial Advisors
"The role of a financial advisor has evolved during the last couple of decades from one of only providing investment advice to being an orchestrator of solutions that address every aspect of our often complex financial lives. These days, many individuals and couples are seeking relationships with advisors who understand how their personal and family values factor into their investment strategies, as well as those who can offer advice that may span multiple generations."
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