Career Pier

Almost all online brokerages, from E-Trade to Vanguard, now offer advice and even financial tools to make managing your finances simpler. But too often, those tools merely reflect the complexity of the financial services industry rather than boiling it down, which can be intimidating and fatiguing. Betterment tries to cut through the complexity to make financial decisions as easy as, say, working an iPhone. “For that younger customer who’s reaching that inflection point where they have enough savings that they need some guidance, but does not have a large enough stake that advisors are calling them every week, I think there is an opportunity for Betterment,” says Craig Martin, director of the wealth management practice at market research firm J.D. Power. Even people who worry about saving regularly and setting specific financial goals often don’t do it. And for many, employing someone else to do it is too expensive.

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Banks' future profits are in saving their customers money by using customer data to identify cheaper energy deals, transport costs and broadband packages, according to Citizens Advice. Writing in the Daily Telegraph last week Citizens Advice Chief Executive Gillian Guy, who also chairs the British Bankers' Association's Consumer Panel, said "the race is on" between banks to realise that there is profit in saving their customers money instead of relying on excessive overdraft fees and up-selling to generate revenue. Arguing that banks provide an essential public service, Guy says that by using "data-cash back", whereby banks analyse the behaviour of their customers and suggests savings - taking a small cut of the money saved - banks would help to boost household savings, while also making profits themselves. Guy said: "Every 10 years or so, in every industry, an idea comes along that changes it all. This takes the form of a simple but profound insight: we thought our business was one thing, but it is something else entirely. Take the iPhone. Telecoms businesses thought they were making phones. Then Apple decided to make a hand-held device for which third-party developers could make programs (now called apps), and which could also make calls. A simple but game-changing shift in thinking. "At Citizens Advice, we are convinced that the banking industry is teetering on the edge of a brilliant idea; it just needs a good, firm shove." Guy added: "For more than a decade, conventional wisdom has been that the only way to make money in retail banking is through interest on loans and debt, excessive overdraft charges, or up-selling additional products: mortgages, insurance, Payment Protection Insurance. This is a formula that is neither good for customers nor banks, which are footing a £14billion bill for mis-sold PPI after a super-complaint made by Citizens Advice. "Banks urgently need to broker a new deal which shows that, like the bank managers of decades past, today's global giants still use their expertise to help save their customers money in every way possible. "New regulations making it easier for customers to switch their bank come in later this year. People unhappy with the service they've received will now be able to leave in search of a better offer without fear of direct debits going astray or being stuck without easy access to their money. This will urgently force banks to sharpen their competitive game and to focus their efforts on giving customers more of what they want. What's more, newcomers like Tesco Bank and Virgin Money will add some much-needed dynamism to the industry. "The first chief executive to realise that the future of banking is in helping people use money effectively - and the profound practical implications of this - will transform the profitability of their business, the lives of millions of consumers and the competitiveness of our economy. "Your bank has access to an incredible amount of information about you: where you live, what you buy, where you shop, what bills you pay, how old you are. It knows who your energy supplier is and how much your last 15 bills were. And it knows comparable information about millions of other people too. So what does it do with this information? Almost nothing. It has been too scared to ask you for permission to use the data, even to help you. "But it is in the value of this information that modern banking's breakthrough lies: offer customers accounts that do everything a utility switching site does - and more. Make money out of saving customers money. "Start with energy bills. Banks should use the data they have to tell customers when they are paying more than other people. Find them the cheapest tariff. Offer them a choice: stay where you are, or click this button and we'll switch you automatically. (We'll take a small cut from the money you save, if that's ok). This is effortless saving for consumers and would subject energy companies to competition that they have yet to feel. "Banks could do the same with travel costs, flagging where frequent journeys would be cheaper with a season ticket, or your television or broadband contract, alerting you when new cheap offers come up. For a little extra information, such as the number of people in your household, the type of car you have or where you tend to shop, banks could go even further to find better ways for you to spend and save your money - a kind of data cash-back. "With the support of suppliers, mobile phone bills and petrol prices could also be thrown into the mix. Companies with competitive rates should be happy to hand over that data and customers would draw their own conclusions from those that decided not to. "To encourage positive behaviour and increase their deposits, banks could nudge their customers into building ‘savings from savings’ by putting the money gained from switching energy or broadband suppliers into a separate account with a good interest rate. "Supermarket banks have already signalled a move in this direction. Customer loyalty cards provide a colossal amount of data about their customers and Sainsbury's has already announced its intention to use the personal information it collects through the Nectar Card scheme to better tailor its banking services: corporate gain driven by customer saving. "This idea is simple but fundamental: banks stop making money from encouraging customers to spend theirs on things they might not need, and start profiting from helping them to save money on the things they really do. It sounds obvious. It could be the future of banking. The race is on."Have your say on this story using the comment section belowGeorge Bailey

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Final salary pensions are a debt-like obligation, particularly in the public sector where the rights of pensioners are established in law (and even the constitution) in some states; there is an interesting case going on in Stockton, California, which may set the rights of creditors against those of pensioners. On corporate balance sheets, pension liabilities are discounted with a corporate bond yield. Falling bond yields have pushed up liabilities and widened deficits; hence many corporates have switched to defined contribution schemes. (Of course, the problem of low returns and falling rates dogs those schemes too, and are made worse by the low level of contributions that are made.)

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Bottom Line: Interim CEOs’ reputation for presiding over declines in firm performance is undeserved. Companies fare worse only in the event that an interim replacement is named following a voluntary departure. However, the majority of interim appointments follow forced departures, and those CEOs appear to have a steady enough hand to afford the board time to find a suitable permanent replacement.

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The man originally hired for the job — former Superintendent of Planning Cameron Bettin — received a demotion of sorts on Tuesday as the park district board of commissioners voted to amend his contract to make him assistant executive director. Board president Peter Hurtado said with the exception of his title, the remainder of the details of Bettin's six-month contract remain the same.

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Posted by Interim Partners, Interim project manager specialists.