Briefly:

(August 21, 2008) Clients who have children heading off to college or university this fall might be wise to remember that these kids won’t be students forever.

For those heading out on their own for the first time, it may be too easy to damage their credit rating, and as potential clients, an advisor should take time to talk to new students about financial matters.

According to a survey conducted for credit card provider Capital One Canada, 39% of students pay no more than the minimum monthly payment on their cards, turning consumer debt into a long-term nightmare.

Fifteen percent commit an even graver crime by not making their payments on time every month, and 16% manage to exceed their credit limit.

“Going to college and university is a stressful time, and worrying about your finances on top of your studies can add another incredible burden to students,” said Laurel Ostfield, spokesperson for Capital One Canada. “That’s why it is more important than ever for young people to learn the basics about money, budget management and the difference between needs versus wants.”

By helping them avoid excess debt, the advisor protects not only the student but perhaps also the finances of the student’s parent. According to the survey, 43% would ask their parents for money if they got in over their heads, compared to 22% who said they would get a job.

Global rebound delayed

(August 21, 2008) Looking forward to a global economic rebound next year? Don’t hold your breath; according to economic forecaster Global Insight, 2009 will see the slowest growth since 2003, and the rebound will not come until 2010.

The group predicts that overall global growth will total just 2.8%. Slow growth in Japan (0.8%), the U.S. and Europe (both at 1.0%) will counteract the still explosive growth of China (9%).

Global Insight also warns that risks remain stronger on the downside and that the forecasts could still be revised lower.

While prices for energy and industrial commodities have fallen off in recent months, the study predicts prices will remain at historically elevated levels over the next five years.

(08/21/08)

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.