Diversions May 23, 2013

The Limit of Gas Prices

Apparently there is a potential breaking point at which people think gas prices are too high, and it’s $3.44 per gallon.
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According to a new consumer price index developed by AAA, the automobile association, half of U.S. adults consider gas prices “too high” when they hit $3.44. Today’s national average price is $3.52 per gallon, but prices currently vary by more than $1 per gallon nationwide.

The national average has remained above $3 per gallon for 28 consecutive months. While the national average has not surpassed $4 per gallon since 2008, it is not uncommon for motorists living in the West Coast, Northeast and near the Great Lakes to pay more than $4 per gallon.

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AAA developed the price index by asking respondents, “At what price do you start to consider the cost of gasoline to be too high?” AAA combined the answers from 974 respondents to determine the potential consumer breaking point for high gas prices, and the report presents the findings of a telephone survey conducted among a combined total of 1,011 adults.

AAA’s gas-price index tracks consumer attitudes by determining at what price the cost of gasoline becomes too high. The results from the open-ended survey demonstrate how attitudes can be expected to change as prices rise above significant milestones:

Roughly two-thirds of Americans (62%) are offsetting high gas prices by changing their driving habits or lifestyle.

The threshold for a given percentage of the population regarding when gas is too high is:

  • $3/gallon (46%);
  • $3.50/gallon (61%);
  • $4/gallon (90%).

Consumers also report changing their driving habits or lifestyle in a number of ways to offset recent gas prices, including:

  • Driving less (86%);
  • Reducing shopping or dining out (71%);
  • Driving a more fuel efficient car (54%);
  • Delaying major purchases (53%);
  • Working closer to home (39%);
  • Carpooling (33%);
  • Using public transportation more regularly (15%); and
  • Other (18 %).

Young adult consumers are more likely to offset recent gas prices by working closer to home or using public transportation more regularly than adults ages 35 and older.

Products May 22, 2013

Matrix Offering Expands ERISA Capabilities

Cetera Financial Group has debuted an unbundled, open architecture solution for advisers who serve as 3(21) fiduciaries to offer more customized advice to plan sponsors.

 

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The platform is part of Cetera’s fee-based plan sponsor program. With the added capability, the program helps advisers differentiate themselves from other independent and wirehouse advisers, said Kian Rafia, vice president of wealth management at Cetera. “The notion of an open architecture, fee-based plan sponsor platform is somewhat unique and new in our industry,” Rafia said.

The open architecture solution utilizes Matrix Financial Solutions to provide custodial services, research and fund screening capabilities through its proprietary RetireTool(k)it, and allows for the choice of recordkeepers and local third-party administrators. It also enables advisers to choose from a wide range of investment vehicles such as exchange-traded products and mutual funds. Additionally Matrix U, the firm’s educational resource, provides access to industry experts and thought leaders to help advisers stay abreast of the latest trends and insights on how to leverage current market conditions to grow their businesses.

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Cetera’s ERISA plan sponsor program provides advisers with a range of tools and support to cultivate and manage employer’s 401(k) plans, including marketing and sales support, recordkeeping, trust and custody services, performance reporting, and adviser education.

For bundled options, Cetera leverages retirement platforms from Fidelity Investments, delivering a program that offers guidance on constructing Cetera-vetted plan menus (with choices spanning more than 2,500 funds and more than 50 families), monitoring investments and choosing qualified defined investment (QDIA) options.

Through a partnership with FI360, advisers can use Cetera’s program to achieve Accredited Investment Fiduciary (AIF) designation, which is necessary for all advisers who provide advice on ERISA accounts. Rafia called the AIF designation a near-prerequisite to getting in the door with plan sponsors, “so we felt strongly about adding that component to our program so our advisers could take full advantage.”

More information is at Cetera’s website.

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