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Financial confidence hits new highs as recovery felt on Main Street

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Financial confidence hits new highs as recovery felt on Main Street

Less affluent consumers trending up in sentiment and personal finances.

American consumers feel more positive about their finances than at any time since 2012, according to recent research from best practices consultancy CEB. Data from the company's biannual Consumer Financial Monitor reveals that age and wealth groups that have until now struggled to fully participate in the recovery -- such as the less affluent and Millennials -- are trending up in their feelings about their personal finances, suggesting the economic benefits of recovery are being shared by a wider array of Americans.

Among age groups, 18-29 year old consumers felt the most positive about their finances, reversing a long-term downward trend.

Americans' feelings about personal finances rose sharply into positive territory for the first time with a 7% gain from the second half of 2014. The gain in sentiment, now standing at net 5%, was largely driven by the less affluent consumer group, which registered a 10% gain in sentiment, hitting a multiyear high amongst the group. Among age groups, 18-29 year old consumers felt the most positive about their finances, reversing a long-term downward trend, which hit a nadir in the first half of 2014.

Significantly for the financial services industry, consumers' positive feelings about personal finances have translated into improved confidence in their providers. Millennials, as well as the less affluent, both reported their highest levels of confidence in financial providers since CEB's survey began. Less affluent consumers also reported much greater satisfaction with financial services providers' products, with a 13% gain from the second half of 2014, leading to a net positive score of 35%. Additionally, less affluent consumers said they paid down debt sooner than required and added to savings accounts in greater numbers this year.

"Financial institutions have a real opportunity to support consumers' shift from 'firefighting' to building a more sound and sustainable financial position," said Peter Aykens, Financial Services Research Leader at CEB. "They will miss the opportunity however, if they reprise their pre-crisis tactics rather than lead with easy-to-understand products and proper guidance."

 

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