A new joint report by the Consumer Federation of America (CFA) and Primerica has found that two-thirds of middle class Americans acknowledge having made financial mistakes—with the average cost being $23,000—and points to the “urgent” need for advisors to focus on middle-income earners.
“Families without a lot of resources are balancing difficult and expensive priorities such as saving enough for college and retirement or paying off a mortgage and consumer debt,” said said John Addison, Primerica Co-CEO, in a statement. ”When you consider these demands within the context of the last decade’s falling incomes, we are nearing a crisis in this country.”
“Primerica’s representatives specialize in working with families that earn between $30,000-$100,000, and trust me, this can be a lonely field to be in,” Addison said. ”The trend on Wall Street is to work with wealthier and wealthier clients, but this report lays out very clearly the urgent need for more financial services aimed at middle-income earners.”
The new report, “The Financial Status and Decision-Making of the American Middle Class,” also laid out the challenging financial condition of most middle-class families. For example, in 2010 the typical middle-class family had financial assets of $27,300—including retirement savings but not pensions—which was 28% less than the $37,800 held in 2007.
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The report is a comprehensive analysis of a national survey of 2,015 representative American adults by ORC International in July and a statistical examination of the Federal Reserve Board’s 2010 Survey of Consumer Finances, by Professor Catherine Montalto of The Ohio State University.
In the ORC International survey, 843 out of 2,015 respondents reported household incomes between $30,000 and $100,000 and were considered to be middle class.
Among the key findings were that the least educated were the least likely to seek information or advice. For example, 23% of those with a high school degree or less, but only 10% of those with a college degree, would not seek information about saving and investing.