The document provides a monthly financial sector trends report covering September and October 2012. It summarizes five key trends: 1) U.S. foreclosure activity decreased nationally but increased in Florida, frustrating homeowners there. This may increase demand for assistance with loan modifications. 2) Americans feel increasingly optimistic about their own finances and local economies but maintain low savings rates, representing an opportunity for financial advising. 3) Cash-strapped baby boomers have little discretionary income left after expenses, relying heavily on Social Security. They would benefit from retirement planning assistance. 4) Many consumers admit to costly financial mistakes in the past and remain wary of risk despite renewed optimism. Clear explanations of services can

1. Monthly Financial
Sector Trends
Report
September 1st, 2012 –
September 30th, 2012
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2. Top FS Trends: U.S. Foreclosure activity lowers nationally, rises locally
Based on RealtyTrac's 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. September's 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 state's 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-fi's. 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
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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
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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
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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 they've made some serious financial blunders. 67% say they've 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.
It's pretty hard to duck major mistakes that impact a family's net
worth, but acknowledging them is the first step toward avoiding a
repeat. As US consumers gain financial literacy, they're 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 they're
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
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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 August's 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
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7. Monthly Financial
Sector Trends
Report
October 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
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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 "I'll just keep working" solution may not work in today's jobs
market. Though savings are up post-recession, reaching for plastic
is a habit that's 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
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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 won't be able to afford a comfortable retirement
That's 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
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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
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