Data & Research August 31, 2011

Americans Feel Less Financially Secure Than in '08

The latest Citibank Economic Pulse survey found that three years after the downturn began, 44% of Americans feel less financially secure now than they did at the start of the economic downturn in 2008.
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Only 10% of consumers reported feeling more financially secure, while 45% reported feeling about the same.   

In addition, the survey found 28% of respondents are concerned about the cost of health care, and 21% are concerned about the security of their retirement accounts. To address their concerns, 30% have changed living arrangements in order to save money, 24% are doing jobs now that they would not have chosen in a better economy, and 24% have decided to postpone retirement.  

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A Citibank news release said the top factor cited for financial security today is staying healthy (45%), followed closely by having a secure job (41%). Slightly more than three in ten Americans (32%) cited avoiding debt, but other factors such as having an emergency fund (17%), owning your own home (16%), and having a college degree (15%) were noted.   

When it comes to staying financially secure in today’s economy, nearly a third of Americans (32%) believe that being their own boss is best. Working for a large corporation (24%) and the federal government (21%) are also viewed as safer employment options than working for a small business (17%) or for a state or local government (15%).  

In Citibank’s quarterly surveys, the percentage of consumers who believe things are forever changed has steadily increased from 51% in September 2010 to 52% in January 2011, 54% in April 2011, and 57% today.
Compliance August 31, 2011

Hearing on Regulation of B/Ds and RIAs Set

The question of how broker/dealers (B/Ds) and registered investment advisers (RIAs) should be regulated will be discussed at a hearing on September 13 by a House of Representatives subcommittee.  
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The Capital Markets and Government Sponsored Enterprises Subcommittee (part of the Committee on Financial Services) will hold a hearing about the regulation and oversight of B/Ds and investment advisers on Tuesday, September 13. The Subcommittee will examine studies mandated by the Dodd-Frank Act about the effectiveness of standards of care applicable to B/Ds and RIAs, and the need for enhanced examination and enforcement resources.

At the center of the debate will be the question of “who” – who should be responsible for regulating investment advisers; should the Securities and Exchange Commission (SEC) continue to bear the responsibility, even though its resources are stretched, or should the baton be passed to a self-regulatory organization, such as the Financial Industry Regulatory Authority (FINRA), which has voiced its ambition for the role (see “SEC Publishes Report about RIA Oversight”).

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The House Capital Markets Subcommittee Chairman Rep. Scott Garrett, (R, N.J.) recently introduced the SEC Regulatory Accountability Act (H.R. 2308), which would require the SEC to conduct enhanced cost-benefit analyses on its rules.

On Thursday, September 15, the full Financial Services Committee will hold a hearing about the structure and operations of the Securities and Exchange Commission and the need for reform of the SEC.

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