Top news articles for financial advisors and personal finance
Week of 8/29
This week's recap focuses on the effects of inflation, personalization in the financial advisor industry, the effects of student loan relief, new mortgage programs and proposed revamping of the Federal Home-Loan Banks.
The bottom 50% of Americans are building wealth even as inflation bites (Paulina Cachero, Financial Planning)
Adjusting for inflation, the wealth of the bottom 50% of Americans grew by 2.8% in the first half of the year compared to the middle 40% of Americans who were down 4.9% and the top 1% of Americans who were down 10%. This growth in wealth can be explained by the fact that the bottom 50% is not as exposed to the bear market in stocks and benefited largely by the wage gain in the tight labor market. Read more about how different factors in the market have benefited the bottom 50%.
Personalization Is The Future Of Business (Taylor Matthews and Brad Genser, Financial Advisor Magazine)
The benefits of providing personalization of goods and services are widespread, leading to increases in revenue, lower acquisition costs and more. Advisors can also use personalization to better meet their clients needs. Read more about what personalization could look like for financial advisors and the benefits of personalization.
How student loan relief can turbocharge retirement savings (Lynnley Browning, Financial Planning)
The recently announced student loan forgiveness plan will unlock extra cash for many to be able to put to use. This extra cash represents an opportunity for advisors to encourage their clients to put this money into retirement savings. Read more about what we know about the forgiveness plan and how to help your clients.
Bank of America Tests No-Down-Payment Mortgages in Black and Hispanic Neighborhoods (Jenny Gross, The New York Times)
As the pandemic widened the gap between minority homeownership rates and white homeownership rates, Bank of America is rolling out a program that will help boost homeownership rates among Black and Latino buyers. The program will include measures such as no requirement for a downpayment. Read more about the program.
Review of Federal Home-Loan Banks Is Planned (Andrew Ackerman, The Wall Street Journal)
The Federal Home-Loan Banks provides liquidity to financial institutions to support housing finance and community investment. However, this system has not been updated since the 1930s. Read more about the government’s plans to modernize and revamp this outdated system.
Would You Take Out a Loan to Buy This Week’s Groceries? (Priya Krishna, The New York Times)
Buy now pay later (BNPL) companies are seeing an increase in usage for groceries in the United States, likely due to inflation that has increased the price of food. Users are taking advantage of the no interest loans to buy their groceries. These loans are most often used by the economically vulnerable with poor credit history (due to the lack of credit check for BNPL), and payments often have large late fees. Read more about how Americans are using BNPL on their groceries and how widespread the issues are surrounding BNPL.