CHARLOTTE, N.C.--(BUSINESS WIRE)--
Bank of America today released its inaugural Small Business Owner Report1, a semi-annual study exploring the concerns, aspirations and perspectives of small business owners across the country. The survey uncovers a sense of optimism about their own business as they look toward the future 12 months. It also found managing the ongoing success of their business creates more stress for small business owners than any other aspect of their lives.
The survey indicates that maintaining a small business causes small business owners twice as much stress as maintaining a healthy relationship with a spouse or partner, nearly three times as much stress as raising children and more than four times as much as managing their own personal finances. In addition, small business owners regularly forego free time (57 percent), exercise (37 percent) and other important personal priorities in order to manage their business.
“We know how much small business owners give up to make their businesses successful, but despite their sacrifices, they are still optimistic about the future,” said Dean Athanasia, Preferred and Small Business executive at Bank of America. “Therefore, we believe that the financial services industry, the business community and the general public must continue to take steps to support the growth and success of our small business sector.”
Confidence in local economy and their own decisions fuel optimism
Small business owners have more confidence in their local economy than the national economy. When asked about the next 12 months, 42 percent expects their own local economic conditions to improve compared to 35 percent who expects the national economy will improve.
However, reservations about the state of the national economy did not dampen optimism among small business owners regarding their future business prospects. Nearly seven of 10 (69 percent) small business owners view their local economy as very important to their business’s success. Moreover, reflective of the independent character that typifies most small business owners, the majority of respondents (53 percent) stated that their own decisions, rather than the overall health of the economy, are more likely to influence business outcomes. This sentiment was particularly strong among young small business owners, those between the ages of 18 and 34 (66 percent).
Confidence was further evident in two key indicators of performance – hiring and revenue expectations. Nearly one-third (31 percent) of small business owners expect to expand their workforce in the next 12 months, while more than half (56 percent) plan to keep their staffing levels consistent year over year. Among those small businesses planning to hire, owners expect to increase the number of employees by 25 percent on average. Furthermore, 61 percent of all respondents forecast a revenue increase, and 32 percent projects that revenues will remain the same.
But tellingly, when considering the potential impact of national economic issues, survey respondents listed the effectiveness of U.S. government leaders (75 percent) as their most pressing concern. Other concerns included commodities prices, such as oil and gas (73 percent), recovery of consumer spending (71 percent) and health care costs (70 percent). Credit availability (54 percent) ranked in the bottom three considerations along with the trade deficit and the global stock market unrest, as shown in the graph below.
Credit and cash management tools available but underutilized
Although 71 percent of small business owners believe they have enough capital to effectively run their business, survey findings suggest a good number of small business owners may not be leveraging readily available tools and resources to help make cash management easier. For example, even though 45 percent of small business owners cited not being paid on time as their biggest impediment to cash flow, less than one-third (31 percent) sought guidance from their bank on best practices for expediting collections while only 29 percent uses electronic invoicing.
When asked to describe their point of view on lending criteria and requirements to obtain a line of credit, a quarter (25 percent) of respondents said that today’s lending requirements are appropriate and should not change, while an additional 20 percent believes that further requirements should be put in place to obtain a loan in order to protect small business owners from defaulting. Moreover, while credit appears to be available – more than three-quarters (78 percent) of applicants who applied for a loan within the past two years were approved – small business owners may not be taking advantage of their lines of credit to further business objectives. Of the 64 percent of small business respondents holding an open line of credit, 50 percent earmark the money for emergency purposes only, rather than using it as day-to-day capital.
“One of the biggest ways we can help our small business clients be more successful is to help them maximize their cash flow,” said Robb Hilson, Small Business executive at Bank of America. “Helping a small business owner with a cash management strategy specific to their unique situation enables them to do more with the resources they have.”
Small business owners value professional financial advice
Only slightly more than a quarter (27 percent) of small business owners describe themselves as being very financially savvy when it comes to running their business. The remaining respondents admit to needing occasional or ongoing expert help. Small business owners rely on a wide range of resources for financial guidance, as shown in the graph below.
In selecting their banking relationships, small business owners prioritize convenience (20 percent), relationship rewards (18 percent) and access to local expertise (17 percent). When asked what single aspect of their banking experience they would change, small business owners most frequently cited an enhanced level of expertise and more customized services while lowering costs associated with the financial services they receive (1 percent) and making it easier to get a loan (1 percent) ranked extremely low on their priority list.
“As the economic environment becomes more complex, Bank of America is committed to providing small business owners with dedicated resources to stay ahead of their financial needs,” said Athanasia. “Through our 1,500 associates who work with small businesses across the country and our 1,200 Merrill Edge financial solutions advisors, small business owners can benefit from highly specialized advice from local experts who intimately understand the full range of their business and personal financial needs.”
Marketing is key to growth
For nearly half of survey respondents (47 percent), increasing the marketing of their business to acquire new customers is the most important action they plan to take to generate additional revenue, surpassing a combination of increasing sales to existing customers (14 percent), better cash flow management (12 percent) and acquiring additional capital (8 percent). When asked about their marketing approach, three-quarters (74 percent) of small business owners say they are actively implementing one or a variety of initiatives and find the approaches shown in the chart below to be most effective.
Notably, despite the prevalence and growing influence of social media, survey findings indicate that small business owners may not be leveraging this marketing tool to its fullest potential. Only 38 percent of SBOs who use social media to market or promote their business engage in conversations with customers, while less than half (47 percent) utilizes social media to offer discounts and deals to their customer base. Conversely, nearly two-thirds of survey participants (64 percent) wish they took better advantage of technology innovations to help manage or market their business.
1 See “About the Bank of America Small Business Owner Report” section for information about survey methodology.
About the Bank of America Small Business Owner Report
Braun Research conducted the Bank of America Small Business Owner Report survey by phone between March 17 and April 9, 2012 on behalf of Bank of America. Braun contacted a nationally representative sample of 1,000 small business owners in the United States with annual revenue between $100,000 and $4,999,999 and employing between 2 and 99 employees. In addition, 300 small business owners were also surveyed in nine target markets including Los Angeles, Dallas, Washington, D.C., New York, Boston, Chicago, San Francisco, Atlanta and Miami. The margin of error for the national sample is +/- 3.1 percent, and +/- 5.7 percent for the oversampled markets, with both reported at a 95 percent confidence level.
Bank of America
Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 57 million consumer and small business relationships with approximately 5,700 retail banking offices and approximately 17,250 ATMs and award-winning online banking with 30 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE:BAC - News) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.
For more Bank of America news, visit the Bank of America newsroom.
The Braun Research survey results conducted on behalf of Bank of America and interpretations in this release are not intended, nor implied, to be a substitute for the professional advice received from a qualified accountant, attorney or financial advisor. Always seek the advice of an accountant, attorney or financial advisor with any questions you may have regarding the decisions you undertake as a result of reviewing the information contained herein. Nothing in this report should be construed as either advice or legal opinion.
© 2012 Bank of America Corporation. All rights reserved.
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Stocks slip on eurozone fears - CBS News
(CBS/AP) Another flare-up in Europe's debt crisis has knocked U.S. markets lower.
Stock indexes waffled between small gains and losses until news broke in the afternoon that Bankia, a hobbled Spanish bank, asked that country's government for nearly $24 billion in support. The head of Germany's central bank also suggested the country wouldn't support region-wide bonds to prop up Spain and other troubled countries.
Signs of a cool-down in Asia also weighed on investors after Taiwan lowered its growth forecast for the year.
The Dow Jones industrial average dropped 75 points to 12,455 Friday. The Standard & Poor's 500 fell three to 1,318. The Nasdaq fell two to 2,838.
Analysts: Europe bank run is under way
ECB official calls for urgent financial overhaul
The death of equities: Here we go again
Rising and falling stocks were evenly matched on the New York Stock Exchange. Volume was thin ahead of the Memorial Day holiday.
Facebook (FB), marking its one week anniversary as a public company, fell 3.4 percent to close at $31.91, still roughly 16 percent below its initial pricing of $38.
Investors have worried about what will happen if Greece leaves the euro, and major markets were down in France, Britain, Germany, Greece and Spain. It's impossible to gauge the exact fallout, but it's likely that traders would dump the bonds of other struggling European countries, such as Spain and Italy, and residents could start to pull money out of banks there.
European leaders are arguing over how to cut the profligate spending of struggling countries without throwing the region further into recession. The messages emanating from Europe were mixed.
The head of Germany's central bank said it was an "illusion" to think allowing euro zone countries to borrow money jointly -- a proposal pushed by other countries -- would solve the crisis.
A top official from the European Central Bank said that the 17 countries that use the euro need an "urgent overhaul" to their structure, including a banking regulator and deposit insurance program that could cover the entire Eurozone.
The parliament of Portugal, which has been pushed close to bankruptcy, endorsed a budget plan that would set legal limits on government spending. Spain's market regulator suspended trading of shares in Bankia, a bailed-out bank that is preparing to ask for even more rescue money from the government.
Markets were rattled in Asia as well. Taiwan lowered its economic growth forecast for the year. Media reports suggested that some of China's biggest banks will miss their annual lending targets for the first time in seven years. China, the world's second-largest economy, has propped up global financial markets in recent years as other countries have slowed.
Can financial education help a person to make better decisions? - star.com.my
“WELL-INFORMED, well-educated consumers can create economic ripples” according to Jeanne M. Hogarth of the US Federal Reserve Board in her paper, Financial Education and Economic Development presented at the 2006 Financial Literacy International Conference. They make better financial decisions for themselves and their families, increasing their economic security and well being. And these economic ripple effects can be significant.
Over the last several years, the issue of financial literacy and financial education has risen on the agenda of financial institutions, government agencies, organisations and policy makers. Increasingly over the last few years there has been a steady stream of media advertisements, events and conferences, articles and news reports highlighting recent efforts to provide financial education to consumers.
Drop a rock into a lake or pond the ripples extend outward with wider and wider effects. So it is also with financial education. Perhaps the greatest challenge in financial education is measuring the efficacy of the programme.
Getting one's financial house in order can take time, and longitudinal studies to prove that a particular programme is effective are costly to conduct. However, there have been some longer-term impact and evaluation studies that show financial education can make a difference.
Financial education of different types
According to Jeanne, personal financial education means different things to different people. For some, it can be quite broad encompassing an understanding of economics and how household decisions are affected by economic conditions and circumstances.
She adds that for others, it focuses quite narrowly on basic money management budgeting, saving, investing, and insuring. Still others include a set of consumer behaviours and money skills within a financial education framework. In reality, a comprehensive financial education approach probably should include the following themes:
(1) Being knowledgeable, educated, and informed on the issues of managing money and assets, banking, investments, credit, insurance, and taxes;
(2) Understanding the basic concepts underlying the management of money and assets (e.g. time value of money in investments and pooling of risks in insurance); and
(3) Using that knowledge and understanding to plan, implement, and evaluate financial decisions.
This implies that the outcome of financial education that is, what a “financially educated” person does includes behaviours such as paying bills on time, having manageable levels of credit, setting financial goals and having a way of achieving those goals through saving and investing, spending wisely, and so on. The specific implementation of these behaviours may vary with income, personal family circumstance, and asset level, however.
Individual behaviours can and should have ripple effects beyond the realm of an individual household. Less visible, but nonetheless important, are how these themes can be expanded to include community development. Having one's financial house in order can lead to stability of housing and family life, which can contribute to stable educational situations for children, and more involvement of families in their community.
In most cases, we assume these farther-reaching benefits of financial literacy will be translated into the country's real economic growth and financial stability.
Linking Financial Knowledge with Financial Behaviors
In research done by Hogarth, Hilgert, and Schuchardt, “Money managers: The good, the bad, and the lost” demonstrates that the higher a consumer's financial knowledge (based on a quiz score), the higher the probability that the consumer undertakes more positive financial management behaviours and uses more financial products and services.
For example, consumers scoring 80% on the quiz had a 0.37 probability of being “active and engaged” in financial management (that is, they undertook more positive financial behaviours and used more financial products and services), while consumers scoring 50% had only a 0.14 probability.
Persons who are more knowledgeable in specific financial behaviours will be more likely to engage in positive cash-flow management, saving and investment behaviours. Again in a study by Hogarth, Beverly, and Hilgert, “Patterns of financial behaviours: Implications for community educators and policymakers”, financial knowledge and learning experiences are the only variables that are consistently associated with more positive financial management behaviours in particular, learning from family, friends and personal experiences.
Difficulties in measuring the effectiveness of financial education
Although it is clear that financial education is beneficial and has a positive impact on the lives of consumers, it is often difficult to identify what kind of an impact it has and to what degree of success.
Researchers and practitioners continue to debate the rigour of various evaluation techniques and the measures to use. While knowledge, attitudes, behaviours and outcomes (dollars saved or debt reduced) are often the metrics, researchers and programme evaluators are beginning to coalesce around the desirability of outcome measures.
But in many cases, increased knowledge does not necessarily change behaviour or overcome our behavioural weaknesses. Many educated and mature adults still struggle with unpaid study loans, overdue credit card debts, defaults of car or housing loan payments, investment losses, bankruptcies, financial scams and insufficient retirement funds.
Workplace financial education
Beyond teaching kids in primary and secondary schools and young adults in tertiary institutions, financial education at the workplace is an important channel to deliver financial literacy programmes to the adults.
Financial education can be used to inform staff of the financial implications of specific pay-slip options from new private retirement schemes, insurances, bank products, retail loan packages and employees' benefit packages or effect of rising healthcare costs and inflation on their income and bonus. Financially-informed staff will be able to set priorities and decide; appreciating better the effects of these options on their present cash flow and their retirement future.
It is recommended that employers conduct needs analysis in order to tailor an education syllabus according to staff salaries and job positions. Employers can even conduct an employee finance health-check survey to understand their staff's financial well-being. The results can help to optimise the delivery of customised financial literacy programmes, thereby improving corporate human capital development investments.
Online courses can be offered to the staff and seminars can be captured on video for those who can't attend. Employers can encourage staff to provide feedback on what they have learnt and open the discussion of programme weaknesses and benefits to in-house discussion forums.
Knowing and doing are two different things
Individuals need to apply what they learn to their lives, families and situations. In the end, personal finance is, after all, personal.
But when individuals learn to cultivate a responsible saving, spending and investment attitude, and do the right thing, the positive ripple effects extend to and can strengthen a country's economy. Add a business community that is working cohesively towards a healthy and sustainable financial infrastructure, good things can happen.
And with readily available and appropriately designed financial education, there is less chance of negative ripples of debt affecting individuals, their families and the countries that they live in.
> Carol Yip, founder of Abacus For Money, believes that if people understand their money mindset, behaviours and money psychology, they can be financially happy and successful. She actively promotes financial literacy and intelligence within families and for women, youths and retirees. Email her at CarolYip@AbacusForMoney.com
NASB Financial Announces Consent Order - RTT News
5/25/2012 4:18 PM ET
(RTTNews) - NASB Financial, Inc. (NASB: News ) said Friday that its subsidiary institution, North American Savings Bank, F.S.B. has agreed to a Consent Order with the Office of the Comptroller of the Currency, the Bank's primary regulator.
The Consent Order replaces and terminates the previous Supervisory Agreement the Bank had entered with the Office of Thrift Supervision, the Bank's previous federal regulator.
The Consent Order requires that the Bank establish various plans and programs to improve the asset quality of the Bank and to ensure the adequacy of allowances for loan and lease losses. The Consent Order also requires the Bank to obtain an independent assessment of its allowance for loan and lease losses methodology, to conduct independent third-party reviews of its commercial and construction loan portfolios and to enhance its credit administration systems.
Among other items, it also requires that the Bank's written capital maintenance plan will contain objectives that ensure the Bank's Tier 1 leverage capital remains equal to or greater than 10% of adjusted total assets and that the Bank's risk-based capital remains equal to or greater than 13% of risk-weighted assets. As of March 31, 2012, the most recent quarter-end, the Bank's actual Tier 1 leverage ratio and risk-based capital ratio were well above these levels at 13.5% and 16.5%, respectively.
The Consent Order does not direct the Bank to raise capital, make management or board changes, or restrict lending.
by RTT Staff Writer
For comments and feedback: contact editorial@rttnews.com
Gunman kills himself as SWAT teams storm real estate office after he released hostages during stand-off with police - Daily Mail
- Police believe the incident is over a financial dispute involving a real estate deal
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A gunman who took 10 office workers hostage on Friday after bursting into an Indiana real estate office forcing a dramatic stand-off with police has shot himself, police said. He was rushed to a local hospital where he died of his injuries.
Two loud bangs were heard Friday afternoon before SWAT team members broke windows and rushed into the Prudential Executive Group Real Estate office in Valparaiso, where police said the gunman had holed up.
Valparaiso Police Chief Michael Brickner said officers determined the gunman had shot himself twice in the head, and believe he had done so before they entered the building. It is thought the gunman was upset over a real estate deal and was demanding his back money.
Siege: Police surrounded a real estate office in Valpariso, Indiana, where a gunman held 10 hostages before shooting himself
Stand-off: Snipers sit trained on the real estate office after the gunman burst in and took hostages
Police had received a 911 call about 10 a.m. reporting that a man with a gun had entered the brokerage office. Grennes said there was a 'brief exchange of gunfire' when officers arrived.
Grennes said there were fewer than 10 people in the building when the incident began and that a 'large percentage' had been able to get out of the building by Friday afternoon. Grennes says one person who was struck in the head during the incident was treated and released at a hospital.
'I do know the vast majority of people are out,' he said. 'I know initially when our officers arrived on the scene they were removing people as they were trying to get to the building. And as the scene progressed, more people were able to leave the building.'
Negotiators were in contact with the gunman, but Grennes would not say if he made any demands. Grennes said he did not believe the gunman was an employee of the brokerage.
'I just know the reason for him being there was a dispute over ... somebody in the building, an employee in the building, owed him money. He believed that,' Grennes said.
Mack Elliott, an agent at the brokerage, said he was not in the office when the gunman entered, but had spoken to a couple of agents who were working at the time. He believed the incident stemmed from a dispute over a real estate transaction.
Safety: Police and fire department officials lead a hostage to a rescue vehicle outside a real estate office
Deadly force: SWAT teams surround the building as negotiators contact the gunman
Financial Advisors Can Boost Business by Helping Entrepreneurs Balance Professional and Personal Wealth, According to New Pershing Guidebook - Yahoo Finance
JERSEY CITY, N.J., May 16, 2012 /PRNewswire/ -- Pershing LLC, a BNY Mellon company, today announced the release of Building a Business with Business Owners, a new guidebook that focuses on how financial advisors can meet the increasingly specialized personal and business needs of entrepreneurs. Because business owners' personal and professional lives are so strongly intertwined, Pershing concludes, advisors have a tremendous opportunity to grow their businesses by helping entrepreneurs untangle their often complex financial situations.
"Offering specialized services to high-net-worth business owners represents an attractive, and potentially lucrative, market opportunity for financial advisors," said Kim Dellarocca, director, Pershing. "Increasingly, we are seeing advisors consulting with entrepreneurs on issues such as cash-flow management, capital allocation and borrowing – value-added services and advice that generalist financial advisors cannot match."
According to Pershing, a growing number of advisors are developing niche business expertise to supplement their traditional offerings, differentiate themselves and drive growth, as industry competition intensifies and pressures on margins escalates. For advisors, taking advantage of this trend presents some serious challenges, including freeing up resources to gain the necessary knowledge and developing new compensation arrangements for clients with low levels of investable assets.
Pershing recommends that advisory firms with limited marketing resources focus on achieving deep penetration in a narrowly defined target market, with no more than five potential market segments yielding optimal results. In the new guidebook, Pershing also warns that because many business owners and entrepreneurs direct the bulk of their personal savings into their business rather than money management accounts, advisors who charge clients a percentage of assets under management run the risk of under-compensation. Instead, advisors should consider premium fee arrangements to offset the added expense of working with entrepreneurs.
"For business owners," Dellarocca added, "signing on for these specialized services can be enticing, and can make them more efficient. But entrepreneur clients may need to be convinced that the advisors they select are true experts in their businesses, are not overpromising, and can work effectively with existing service providers."
According to the guidebook, key areas where entrepreneurs can benefit from specialized advisory services include:
- Cash Flow and Financing: Supporting and sustaining both business and personal spending needs, as well as structuring financing for start-up and expansion.
- Risk Protection: Insight into insurance products, hedging strategies and legal assistance.
- Benefit Programs: Group health or 401(k) plans, non-qualified retirement plans and insurance benefits.
- Wealth Management: Integrating personal financial planning and business planning, especially in the areas of tax efficiency, liquidity, estate planning, and wealth transfer.
- Business Planning: Aligning business strategy with personal life and financial goals, encompassing tax planning, succession planning, business valuation, equity transfer and business succession.
To obtain a copy of Pershing's Building a Business with Business Owners, visit pershing.com
Pershing LLC, a BNY Mellon Company, is a leading global provider of financial business solutions to more than 1,500 institutional and retail financial organizations and independent registered investment advisors who collectively represent approximately 5.5 million active investors. Located in 23 offices worldwide, Pershing and its affiliates are committed to delivering dependable operational support, robust trading services, flexible technology, an expansive array of investment solutions, practice management support and service excellence. Pershing is a member of every major U.S. securities exchange and its international affiliates are members of the Deutsche Börse, Irish Stock Exchange, the London Stock Exchange and the Australian Stock Exchange. Pershing LLC is a BNY Mellon company. Additional information is available at pershing.com.
BNY Mellon (BK) is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, offering superior investment management and investment services through a worldwide client-focused team. It has $26.6 trillion in assets under custody and administration and $1.3 trillion in assets under management, services $11.9 trillion in outstanding debt and processes global payments averaging $1.4 trillion per day. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation. Additional information is available on www.bnymellon.com or follow us on Twitter@BNYMellon.
A real estate transaction gone wrong is not worth ending your life since your brilliant (not) plan to go into the real estate office with your gun to get your money back didn't work out.
- Lisa, Los Angeles, USA, 26/5/2012 04:55
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