Though Worried about Finances, Many Doing Nothing

While many homeowners are spending less or paying down debt, others are experiencing inertia about making changes.

A survey of U.S. homeowners by Wells Fargo & Company found fear of unemployment and the state of the job market most influence homeowners’ concern over their financial situation, yet, when asked how they are conducting their personal finances, two in five homeowners (38%) said they have made no significant changes in the past year.

Those who have made no changes cited they “don’t have a need” as the primary reason, according to a press release of the results.

However, 60% of respondents ages 18 to 41 said something else is holding them back, compared to 27% of those who are 42 and older. Nearly one-quarter of younger homeowners (24%) said it seems pointless given their financial situation, while another 22% seem to be procrastinating, saying they “plan to but haven’t started yet.”

The rest either don’t know how or what to do (10%), don’t have the time (6%), or don’t want to even though they should (2%).

The survey also found that younger homeowners are not as educated as they would like to be about how to effectively establish and use credit. Thirty-five percent of homeowners ages 18 to 29 and 19% of those ages 30 to 41 said they have not recently sought information on how to get and improve their credit but wanted to do so, compared to just 11% of homeowners ages 42 to 60 and only 3% of those ages 61 and over.

Other homeowners said they’re spending less. Thirty percent of homeowners said in the past year they’ve paid down debt, and 25% said they’ve learned how to better manage their budget on their own.

Compared to a year ago, homeowners are spending even less, with at least 50% reducing what they spend on entertainment and vacations, 50% looking for the lowest prices, and about two in five homeowners (37%) purchasing only what they need.

“The silver lining of this economy seems to be the changes to more financial healthy behavior,” said Jamie Moldafsky of the Wells Fargo Home Equity Group. When homeowners were asked if they plan to make specific changes in their spending short-term, while the economy is in a recession, or long-term changes after the economy has recovered, 77% of homeowners who are purchasing only what they need plan make it a long-term behavior, she said. Furthermore, a large majority of those who are price-shopping, teaching children about managing finances, and budgeting consider these to be long-term changes in their lives.

The survey, conducted for Wells Fargo by marketing research consultancy Ipsos Marketing, polled 1,600 U.S. homeowners in June.

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Consulting Firm Offers Mock Audits to RIAs

RIA In A Box, a consulting business that helps set up registered investment advisory (RIA) firms, said it will begin offering mock audit services to RIA firms that want extra preparation for regulatory audits.

The service will begin in September and will be available initially to those RIAs established by RIA In A Box, the company said.

The mock audits, which take between three and five hours, will be performed by a compliance auditor, who will review the materials that the state or the SEC will look for during a standard first-year audit, the company explained. The compliance auditor will come to the RIA office and review materials such as the ADVs, client agreements, files and folders, books and records, policies and procedures, as well as advertising, marketing, and promotion materials. In addition, the RIA In A Box compliance auditor will answer compliance questions and interview the firm principal to ensure all the materials and information are in synch.

The compliance auditor will do a random sampling of all materials, take the information provided by the RIA owners, and provide an audit report highlighting any potential issues and suggestions for improvements.

While no one needs a mock audit, some people are concerned and “this is an easy way to make sure you are prepared,” said Zachary Gronich, president, RIA In A Box.

RIA In A Box works with all 50 states, Washington, DC, and the SEC. The firm is headquartered in Houston, Texas, and has recently opened an office in New York City.


For more information, visit www.riainabox.com or call 866.611.7638.

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