HOLLYWOOD, FLA. - Advisors and banks are facing a "new normal," according to Douglas Berlon, a global practice leader for financial services at Gallup Consulting, and that is going to mean advisors and banks have to alter their strategies in order to make money.

Negativity still reigns, although the situation is improving, Berlon said at the Bank Insurance and Securities Association's annual conference Tuesday.

As of Feb 28, 57% of people say that the economy is getting worse and 37% say that it is improving. While that means consumers are still mostly on the gloomy side, positive and negative sentiment has converged a lot over recent months to where it's starting to meet in the middle.

Problematically, though, while general sentiment seems to be trending at least sideways if not upward, consumer confidence and consumer spending are now decoupled for the first time, Berlon said, and advisors will have a more difficult time selling clients into longer-term investment vehicles as a result.

This is in spite of seemingly contradictory findings that state that 62% of people now consider themselves savers, not spenders, up from 48% in 2001. The number of savers versus spenders stayed flat, at around 50% each, until last year, when it abruptly jumped to 59% savers.

What that really means, though, is that savers are simply spending less than they were. The average person spent $89 per day in December 2008, dropping to $64 per day in January 2009.

Compare that to $73 per day in December and $61 per day in January 2010, and that's a significant drop in spending.

Wealthier people with household incomes of $90,000 and above spent $113 per day in January, a 13% decline from a year earler.

As many as 70% of people say they're cutting back on spending, and that includes buying investment vehicles.

A positive trend may be on the way, though. While not much is happening in the job market as a whole, 25% of companies now say that they're hiring, while 23% say that they're firing. This, obviously, doesn't do much for consumer confidence, but at least the companies growing their workforces now outnumber those cutting jobs.

Geographically, the growth in jobs is happening in the states in the middle of the country and it's weakest on the coasts. Unemployed or underemployed people (both groups act the same) typically don't spend, don't save and they're pretty unhappy, which makes them poor prospects.

For this reason, advisors in the heartland should have an easier job growing their books than reps in those states that were hardest hit by the economic collapse and where job creation is slim.

Making life more difficult, on the surface at least, is that many consumers now blame banks for a lot of what went wrong, and only 22% of people have any degree of confidence in the industry as a whole. Interestingly, though, when Gallup polled people about their own banks, a whopping 72% expressed either quite a lot or a great deal of confidence in the institutions they personally deal with.

"A local feel and individual conversations with clients are what's going to make a difference this year," Berlon said.

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