CFI.co Blog - Page 20 of 47 - Business, Finance, Economics

Otaviano Canuto, Policy Center for the New South

After peaking in 2007 at around 6% of world GDP, global current-account imbalances declined to 3% of world GDP in the last few years. But they have never left entirely the spotlight, albeit acquiring a different configuration from that which marked the trajectory prior to the global financial crisis (GFC).

This is not because they threaten global financial stability, but mainly because they reveal asymmetries in adjustment and post-GFC recovery between surplus and deficit economies, and because of the risk of sparking waves of trade protectionism. They also reveal the sub-par performance of the global economy in terms of foregone product and employment, i.e. a post-crisis global economic recovery below its potential.

Budgeting

The Benefits to Renting Commercial Real Estate

ByCFI.co Blogger

It’s not a big surprise that the real estate market is hot right now, especially in key business areas like California. This applies to both residential and commercial real estate. As we’ve seen, rental trades adjust with the times, but until the bubble bursts, you should consider your options for commercial real estate in your area available for rent.

The Benefits to Renting Commercial Real Estate

There are many shared working spaces that can be home to your business for a while until you grow enough to be able to purchase your own commercial real estate property. Here are a few reasons as to why it could be the best option for you and your business until that time comes.

Flexibility

The world is uncertain, so it’s really important to be flexible, which is one of the major pros of leasing a commercial property. Renting office space allows you to be flexible without having to make any major commitments. If you need more space, you can seek it out, but if you need to scale back it’s easy to do that as well. If most of your staff is now working remotely, you can still have a space for them to go if they want to have a quiet place to work. Renting commercial office space can be flexible in a financial capacity as well, allowing you to pay based on space and duration.

Financially friendly

Buying office real estate can be quite expensive these days, so in real estate, “boring” is good, as is stability. The option to rent office space allows you to still have a location in a prime spot without footing a major bill for it. Renting also minimizes your financial burden, since you don’t have to pay for the other costs associated with running an office. You can then use the money you’ve saved from these costs to invest in growing other parts of your business, or creating a savings goal for eventually purchasing an office space.

Professionalism

Having a physical location for your business is huge in terms of your reliability and professional appearance. At first, you might think renting will reflect poorly on your business, but it’s a strategic plan that can help ensure a brighter future. No matter the arrangement, having office space looks more professional than meeting clients or employees in loud public places for meetings. Having a fully functioning office is the best way for your employees to focus and to show your clients and customers that you are serious about what you do, both now and in the future.

The world of real estate is difficult to navigate, and while it can be an extremely difficult task to find space that fits your exact needs, there are companies like Jeff Tabor Group that make it simple to find the right place for you and your employees. With prime, spacious locations and affordable options, there are many different opportunities for you to build your business for a successful future.

Finance

Top 8 Factors to Consider When Selecting Financial Advisors

ByCFI.co

Need a hand with setting financial goals? If so, if you’re really not alone, especially since there are almost $90 trillion of international assets under management right now. Not sure how to find an expert with financial advising experience? To tell you the truth, finding the right professional to help you handle your finances requires knowing your options. Take a look at a few factors to consider when selecting financial advisors below!

1. The Suitability Standard

If you’re looking for a financial advisor who will put your needs first, consider this. Financial advisory firms that meet the suitability standard address and disclose any “conflict of interest” they may have when representing you. On the bright side, most financial advisory firms will put this down in writing for future reference.

Besides this, it’s also essential to think about whether or not your firm is an RIA, or Registered Investment Advisor. That’s because they are held to a higher standard as well!

2. Upfront and Clear Fees

Let’s be honest. No one wants to work with a financial advisor who isn’t clear about their fees. That being said, figuring out the total cost of getting your portfolio together can be a difficult and confusing task.

On the other hand, finding a financial advisor you can trust means that they will be more than happy to break down all of their fees for you.

This can include everything from:

Hourly financial planning fees
Fees for managing your portfolio
Other hidden fees

Once you’ve made sure that all of your financial fees are as transparent as possible, you should be good to go.

3. Accurate Performance Reports

Now that we’ve got that covered, it’s also essential that your financial advisor of choice provides accurate performance reports. That’s because user-friendly transaction and holdings reports are the keys to managing your portfolio successfully.

To get started, you must decide whether you like to receive your reports on a:

Monthly basis
Quarterly basis
Semi-annual basis

We highly recommend that the more you review your financial portfolio, the better!

4. A Simple Investment Process

When you’ve found the right financial advisor for you, the next step is to ask them what their process for investments is. For instance, they may let you know which investment vehicles are products that will work in your favour.

In addition to this, your financial advisor should also let you know whether not you need to make any changes to your existing investment portfolio. Besides this, they may also ask you about your primary contact information.

In exchange, we encourage you to ask your financial advisor about their professional credentials and experience as well.

5. An Independent Custodian

Additionally, you should ask your financial advisor if they use independent custodians like:

Charles Schwab
Fidelity
TD Ameritrade

In case you didn’t know, independent custodians are great for providing additional asset reviews and records aside from your financial advisor. They’re also helpful in protecting your account from any fraudulent activity!

6. Honest Offerings and Services

You should also clearly understand the level of service that your financial advisor will offer. For instance, email and ask them if financial planning is included in their initial package. Also, find out what kind of financial planning software they use and whether or not you will have access to it. Believe it or not, this can potentially make or break your deal as well.

To get the ball rolling, here are a few more questions that you should ask your financial advisor:

Do they schedule weekly, monthly, quarterly meetings?
How long will it take to hear back from them?
Do they provide investment offerings for beginners?

Once you learn more about the financial services that you are looking for, picking the best financial advisor for you should be a piece of cake.

7. Events and Education

Another important thing to consider is whether your financial advisor provides any educational events. This is particularly helpful if you’re interested in learning and understanding your overall financial portfolio.

To get started, be sure to ask your financial advisory firm if they will take the time to answer any questions you may have during your regularly scheduled meetings. Also, you can ask them if they will continue to educate you on your financial portfolio as time goes on. Finally, covering complex topics such as asset management is vital to your success as well.

8. Life Transitions

Last but not least, do your best to choose a financial advisor who puts your life transitions as their top priority. This can include common event such as:

Getting married
Having children
Getting divorced
Losing loved ones

Ask your financial advisor if they have any experience dealing with customers who are going through difficult life changes.

If so, what did they do to help them? As long as you feel comfortable opening up to your advisor, you should be in a good position to put your finances in their hands!

Why Hire a Financial Advisor?

Sometimes, going through a major life event is enough to make you want to rethink your personal finances. Typically, this type of event will include some sort of major gain or loss of money.

So that’s why it’s important to seek a financial advisor if you are:

Close to retirement age
Receiving an inheritance
Getting married soon
Going through a divorce
Lost a partner
Helping your parents with their finances
Unsure of how investing works
Looking for a “second opinion”

Now that we’ve got that covered, choose your advisor wisely!

Selecting Financial Advisors Is Simple

Having a hard time finding the perfect financial advisor for you?

Here’s the thing: When it comes to selecting financial advisors, the process shouldn’t be complicated. Fortunately for you, we are here to help.

From comparing advisor fees to reading references and reviews, we’ve got everything you need to succeed. If you’re finally ready to talk to your advisor, don’t forget to read our handy guide first!

Looking for my financial and banking help?

If yes, don’t hesitate to read more of our blog right away.

Wealth Management

Make Smart Investing Choices With These UK Stock Market Tips

ByCFI.co

It’s been a tumultuous year for the UK stock market to say the least. Between Brexit and the Covid-19 pandemic, March led to some record-breaking highs and lows in the FTSE 100 due to global uncertainty. While some stock exchanges have recovered significantly, the UK stock exchange remains burdened. But it’s not all doom and gloom. There are still many ways to make smart and safe investments on the London stock exchange in 2021. We’ve put together our best stock market tips to help you know how to invest with confidence.

Knowledge is Power

We’ll start with a note for newcomers, although it could also serve as a reminder for the veterans of the exchange. Due to all the hype and chaos around the potential GME short squeeze, many new investors entered the market this year.

This is great news that more people feel empowered to invest, but it’s so important that investors have the knowledge they need to invest well.

By this, we don’t mean knowing everything there is to know about each stock and where it will go. Nobody knows this and anyone who says they do is kidding themselves. What we mean is you need to understand the terminology and mechanics of the UK stock market.

Know your terminology and particularly synonyms for all the different buzzwords. Know which companies pay dividends. Know your different market indices.

One of the most important things to understand and accept is that past performance does not guide future returns. While analysing previous share performance and market performance can give us great insight, that’s all. They don’t guarantee the future of the market or a certain stock.

The LSE Is Unique

The London Stock Exchange (LSE) is one of the largest stock exchanges in the world, with a market value of more than £2 trillion. It’s one of the oldest exchanges in the world and comes with unique benefits and risks.

We’ll start with the good news. Because of its age and stature, the LSE is a financial hub. It’s an advanced financial market.

This makes the securities market both very liquid and stable for investors. For those looking to exchange outside the New York Stock Exchange, the LSE is one of the best options.

It’s also home to some of the largest blue chip companies such as GlaxoSmithKline, Unilever and AstraZeneca. This comes with security, so investing in the LSE comes with less risk than other financial markets worldwide.

It’s not all good news though. The political risks of Britain are unique. While the entire world has been affected by the Covid-19 pandemic, only the UK has the additional risk of Brexit.

Though we’ve left and absorbed the initial hit and consequences, economic uncertainty remains. Not least, as Scotland and N.I polls both continue to show voters wish to leave the UK and rejoin the EU.

Politics aside, the UK economy is a service economy. This is common for developed countries and in good times can mean more stability. But in more volatile times, commodity prices and consumer credit changes can cause problems fast.

Much like our first point, understanding the unique risks and benefits of the LSE allows you to make safer and smarter investments long-term.

UK Stock Market Tips

This uncertainty sounds like bad news, but it isn’t that simple. For those who already invested and faced the market crash of 2020, it seems that for now, the storm is over. For those looking to invest, it’s a bargain.

Though the market has recovered a lot throughout 2020 and into the first quarter of 2021, share prices are low. Barring another global catastrophe, they’re unlikely to be this low again for a while. It’s an excellent opportunity to invest.

This is particularly true for industries worst hit by the pandemic. Share prices in the hospitality sector remain low despite government support. With the end in sight thanks to the vaccine rollout, as well as substantial support to get to the finish line, this could be a great investment as normality returns to the UK.

Stocks that have risen throughout the pandemic may also remain a good long-term investment as consumer habits change. Online businesses such as Ocado have enjoyed strong growth for obvious reasons throughout 2020.

But research suggests the new norm will remain in some aspects. 40% of UK consumers surveyed said they would continue to spend online post-pandemic.

While this is good news for online businesses, it adds additional uncertainty to an already suffering high street. This means staple stocks that were once a safe investment remain troubled into 2021.

The best investing tips we can offer are the ones that could apply to investing on any stock exchange: plan, diversify and remain calm.

Plan

Planning for the unknown can seem impossible because it is. By plan, we mean understand the risks and rewards and plan for uncertainty.

You cannot control how your investments perform, it’s the nature of the game. But you can control how you prepare your investment portfolio to prepare for market changes.

Planning can help you understand how long you’re prepared to invest for, what your objectives are and how your assets are spread. In a volatile market, this can help keep you sane and know when to sell.

Diversify Your Portfolio

In other words, don’t put all your eggs in one basket.

It can be tempting when you read analysis after analysis about some definite market changes. But it’s never definite and as Reddit has proven, experts come in all shapes and sizes.

This isn’t to say don’t invest when the opportunity arises but spread your investments. Over the long-term, variety and patience almost always pays far more than short-term gains.

Diversifying your portfolio should be part of your planning. Researching company operations, competition and the wider industry will help you create a smart portfolio that will perform well throughout market changes.

Keep Calm and Carry On

If the last year has taught investors anything, it’s that nobody can predict the market. So remain calm.

The best investors know not to react rashly to emotion. If you spend your day keeping an eye on scoreboards it will lead to overreactions to short-term changes.

The ups and downs are all normal, so ride them out and focus on your own plans. Planning and diversification can help you avoid panic selling as you know your strategies and long-term goals.

More Financial Information

The best UK stock market tips are the age-old advice applicable for any stock market. Understand your market, plan well and diversify your portfolio. For further research, our blog offers great insight into the UK stock exchange, as well as global exchanges, so make sure to check it out.

Bonds

Région Ile-de-France is the first European Sub-Sovereign to issue an ESG benchmark bond with a negative yield on the financial markets

ByCFI.co Blogger

In order to fund its annual investment programme, in particular its regional recovery plan (€6.8bn between 2020 and 2022), Région Ile-de-France issued a new €500mn public bond on 12 April 2021.

Région Ile-de-France becomes the first European Sub-Sovereign issuer to print an ESG benchmark bond with a negative yield (-0.12%).

Investors demonstrated a massive support for this transaction, despite a negative yield, highlighting their confidence into the Région Ile-de-France’s credit. Indeed, the issuance attracted up to €3.5bn of interests, i.e. 7 times the amount announced, with a total of 114 orders. As a reminder, the previous record for the Région was €1.3bn in 2018 (in comparison, the raised amount was also €500mn). This record is now exceeded by +€2.2bn.

The Région keeps on diversifying its investor base with 16 jurisdictions participating in this new transaction. France, Germany, Italy and Switzerland accounted for more than 60 % of the interests. The bonds were allocated to buy and hold investors committed to sustainable financing.

This strong success confirms the Région Ile-de-France’s position as a European leader in sustainable financing. Since 2019, the Région is committed to issuing 100% of its funding programme in sustainable format, representing 80 % of its outstanding debt versus 35 % in 2015.

This is the first transaction of the Région issued under its updated framework for Green, Social and Sustainable bond issuance, aligning with the European taxonomy. In its Second Party Opinion, Vigeo ranked the use of proceeds, the selection and evaluation process, as well as the management of funds as “best market practices”.

Région Ile-de-France is also the first European Sub-Sovereign issuer to have engaged in the alignment of its framework to the upcoming European standards, contributing to the success of the transaction.

Despite the Covid-19 related economic crisis, the Région’s financial ratios will stay on a more favorable track in 2021 compared to 2015. The current margin rate would stand at 32.1% in 2021 (vs. 20.5% in 2015). The self-financing capacity doubled compared to 2015.

At the end of 2021, the outstanding debt will be in line with the 2015 level. As a reminder, between 2004 and 2015, it increased by an average annual rate of + 10 %. At the end of 2021, the debt payback ratio should amount to c. 4.5 years, way below its late 2015 level (7.5 years).

Thanks to a tight operational expenditure control since 2016 (- €2bn in multi annual expenditures), the Région Ile-de-France was able to face the Covid-19 crisis with a solid financial position.

The Région has received the best rating possible at this time in France, in line with the Republic of France (Fitch “AA” and Moody’s “Aa2”). Fitch affirmed its rating on Friday 9 April, highlighting that: “Ile-de-France has tight control of expenditure, as reflected by a continuous decline in operating expenditure in the last years” […] “Ile-de-France’s liabilities carry little risk” […] “[its] debt payback ratio remained sound in 2020” […] “despite the impact of the pandemic” […] “In 2020, net adjusted debt declined for the third year in a row”

In March 2021, Région Ile-de-France received the Capital Finance International – CFI.co – « Best sustainability bond issuer – France » award.

Economics

Secular Stagnation and the Big Balance Sheet Economy

ByCFI.co Blogger

Otaviano Canuto, Policy Center for the New South

Private balance sheets have risen relative to GDP in advanced economies in the last decades, in tandem with a trend of decline in long-term real interest rates. Asset-driven macroeconomic cycles, along with a structural trend of rising influence of finance on income growth and distribution, have become part of the landscape. Underlying secular trends of stagnation may also be suggested, making the macroeconomic dynamics dependent on the balance sheet economy getting bigger and bigger.

Banking

6 Common Online Banking Mistakes and How to Avoid Them

ByCFI.co

In recent years, online banking has continued to grow as banks offer more and more online and mobile banking services. In fact, 73% of banking customers use online banking at least once a month. Similarly, 59% use mobile banking at least once a month.

With this rapid rise in popularity comes some concerns for bank account holders. Luckily, it is easy to avoid the most common online banking mistakes. We’ll take a look at what to keep an eye on and how you can make online banking a breeze.

1. Login Safety Mistakes

One of the most common banking mistakes is not having adequate safety measures set for online banking services. You should never use auto-login features. This can make it too easy for someone else to access your account.

Instead, use a password or biometrics login on your phone. If possible, you should also use two-factor authentication to ensure additional safety.

It’s also important to choose a unique username and password, one that you do not use anywhere else. Your bank may be taking strict online security measures but other websites you use may not.

If a hacker finds out your password on another website and then learns that you have used it in multiple places, they could have easy access to everything, including your bank account. For similar reasons, you should also change your password regularly, so if a security breach does occur your account is not at risk for long.

Speaking of passwords, it is imperative that your bank account password is very strong. Use a mixture of uppercase and lowercase letters, symbols, and numbers. Make sure it’s not easy to guess either.

2. Unsecure Online Access

How you access your online bank account is also important. This is particularly true if you plan on accessing your online bank in public or through a device you don’t own.

Don’t bank on public wi-fi if you can avoid it. You also shouldn’t use public computers. Even if you log out completely, hackers can still record keystrokes to gain access to your accounts.

When using your bank’s website, make sure the web address includes “https://”. The “s” is important as it indicates that there are extra security features protecting you.

If you want to download your bank’s app, make sure it is the official one. Download it via iTunes or Google Play. You may even be able to download it through your bank’s website. Either way, make sure your phone is also protected with a strong password too.

3. Not Checking Banking Activity

Another common online banking mistake is not frequently checking your online banking activity. If fraudulent activity occurs, it’s important to catch it early so you can talk to your bank and rectify any issues.

But in order to do that, you need to actively be aware of what is going on within your account. Online and mobile banking make it easy to view your recent activity. Simply look through your transactions once a month to make sure everything is how it should be.

If you notice anything is off, you should then immediately get in touch with your bank. Doing this does not take a lot of time and could prevent you from having to deal with much larger problems down the road.

Additional online banking services can make staying on top of your account even easier. Many banks allow you to enrol in email, text, or push alerts that are triggered by certain activities. These could include unusual activity, balance thresholds, or transactions meeting certain criteria.

These options are usually available in your profile or through the security features section of the website. Signing up for these options lets you know about problems with your account between times when you check on it. This can help you keep an eye out for anything unusual.

4. Handling Mobile Deposited Checks

Being able to remotely deposit checks can save you a lot of time. But, it’s important that you handle mobile check deposits correctly.

Instead of throwing the check away as soon as you deposit it, keep it for two weeks. It takes a few days for the check to clear. If there is a problem reading the check, you’ll have proof of the correct amount. Afterwards, be sure to shred the check, instead of only throwing it in the trash.

5. Mistakes When Making Online Payments

Online payments make it easy to send money to others and pay bills. But, you need to be very careful when doing these actions.

If you are scheduling a payment, make sure the date is correct. Sending it too late could cause late fees if it’s a bill. Also double-check the amount you enter. Even a slight change in decimal can make a huge difference.

Finally, be sure you follow through with the payment. Online banking portals may have multiple steps. Follow through and make sure you end up with a confirmation page or email. Otherwise, you could owe late fees for your bills if the payment isn’t fully completed.

6. Sending and Receiving Money

If you send money to another person or account, be sure to double-check their details very carefully. If the details are wrong, you could send the money to a different person or business. This is very difficult to correct as the other person would need to approve returning the money.

If you expect to receive money from someone else, also make sure the details you give them are correct. Otherwise, you may not receive the money you are expecting. This can be difficult to fix too if the person accidentally sends it to someone else.

Avoid Online Banking Mistakes

Online banking is an important part of modern financial management. This is why avoiding common online banking mistakes is so important. Taking these measures can save time, money, and a lot of potential heartache.

Subscribe to the CFI.co magazine to learn even more ways to improve your finances.

Finance

7 Invaluable Benefits of a Financial Planner

ByCFI.co

If you are serious about managing your money and accumulating wealth, the benefits of a financial planner can take all the stress and burden away from doing it yourself.

Sure, you could feel competent at investing and money management, but do you really have the time to go in-depth?

Yet, opting to work with a financial planner won’t suit everyone. There are pros and cons when using a financial planner or adviser, but we do think the benefits we’re going to discuss are well worth considering.

So let’s check out seven benefits of a financial planner.

1. Full-Time Professionalism

The first and obvious benefit of choosing to work with a financial planner is that they are full-time professionals, making investment decisions day in day out.

They will have a wealth of knowledge and plenty of tips about where to invest money. Plus, they can prove to you with past clients the sort of returns they achieve.

With all their training and know-how, it would be hard to compete with what they are capable of in terms of investing and managing your money wisely year on year.

Keep in mind, however, just because someone is a qualified and experienced financial adviser, it still doesn’t give you any solid guarantees that you won’t lose money. Going with a financial adviser is always a risk.

But typically, a financial planner will run you through different investment options with varying calculations of risk attached to them. Ultimately, you will be the decision-maker in the process. Your financial planner just handles the more technical aspects of your investments, as well as offering tips and advice.

2. Tax Advice

When anyone invests their money and makes capital gains on their wealth, tax is always an issue. In some cases, taxes can destroy the point of investing as they can simply erode away your gains to a pittance.

A financial planner should be experienced enough to know how to navigate the tax realm in your favor. They will tend to let you know various options you can choose to help reduce your tax burden, and they’ll be up-to-date on new regulations and changes in the law.

3. Objectivity

One key benefit of a financial planner is that they are likely to be a lot more objective than yourself when investing your money.

This benefit is strongly linked to the professionalism of a financial planner. They are just doing their job investing your money – they don’t have emotional attachments as you may have.

When emotions get in the way of investing, you’re treading on a pathway to ruin. Objectivity is essential to make wise investment decisions, and a financial planner will give you that.

They can either consult with you about investment decisions they’d like to take for you and explain them clearly.

4. Partnership

A financial planner doesn’t just get the keys to your car to drive off alone into the sunset. They will be available to discuss things with you and keep you updated on what’s going on with your hard-earned cash.

A financial planner is someone you can collaborate with, they’ll listen to you, and they’ll try their best to understand your wants and needs.

As well, the communication aspect of your partnership can be extremely beneficial. By speaking out ideas and strategies allowed, they can become more obviously viable, or conversely, something to avoid.

Plus, there are plenty of tips out there that will help you monitor your financial adviser.

5. Proactivity

This benefit is linked in a sense to the points of objectivity and professionalism.

A financial planner will be poised and ready to anticipate almost every eventuality that could happen in the markets and with your money. They don’t let their emotions get the better of them, which is easier for them since they are trained professionals.

They will also seek out new investment ideas that you might be aware of and get you tied up in some lucrative opportunities ahead of the curve.

Furthermore, they can implement any ideas that you may have with speed, which you might not be capable of doing yourself.

6. Organization

For many of us with busy schedules and limited time, managing the flow, saving, and investment of our money can become overwhelming.

It may be that you’re losing money that can be easily kept if your finances and payments are restructured in a more organized and logical manner.

Having control over your finances can relieve a lot of stress, and it could even be the case that you save more money by actually paying for the services of a financial planner.

It’s funny how they don’t properly teach us the ins and outs of taking care of money and investing at school. Now you have the opportunity to see your financial planner, not only as a money manager but a teacher of investing and finance too.

7. Relaxation and Free Time

Wouldn’t it be amazing to have all your financial worries set aside and dealt with by someone you can trust?

Most of us have enough on our plates already with work, family, and other commitments. Choosing a financial planner’s expertise will surely give you the peace of mind you deserve and some much-needed relaxation.

The Benefits of a Financial Planner

We’ve just mentioned only seven benefits of a financial planner. There are loads more benefits to take advantage of if you decide to take the leap and regain control of your finances.

It will be like starting off on a new journey into the unknown at first, but once you get your bearings and develop a rapport with your financial planner, we think you’ll be surprised at the positive changes that will occur.

Please check out our blog for more financial advice and wisdom.

Economics

The Pandemic Will Leave Scars on the Job Market

ByCFI.co Blogger

Policy Center for the New South

Also: Seeking Alpha, TheStreet.com, Capital Finance International

All economies affected by the pandemic have something in common. The rate of vaccination of the population—quite different in different countries—has been the main factor determining the prospects for the resumption of economic activity, as it is a race against local waves of transmission of the virus.

Personal contact-intensive services have borne the economic brunt of the pandemic. To the extent that vaccination enables them to restart, one may even be able to witness some temporary dynamism in the sector because of pent-up demand. However, international tourism will not be included at the outset since vaccination will have to reach an advanced level both at the origin and destination of travelers.

But let us not be deceived: the pandemic will leave scars and countries will not return to where they were. There will be a need for retraining and job reallocation for part of the populations of all countries.

The pandemic is leaving a trail of unemployment, particularly affecting minorities, low-skilled workers and, in Emerging Market and Developing Economies, women, who predominantly occupy jobs in contact-intensive services. Figure 1 displays estimates presented in chapter 4 of the IMF April World Economic Outlook released on March 31.

Figure 1 – Average Unemployment Rate Change in Percentage Points — **Figure 1:** Average Unemployment Rate Change in Percentage Points. *Source: IMF (2021), World Economic Outlook, April (ch. 4)*

Before the pandemic, it was already known that ongoing technological changes—automation and digitalization—were posing challenges in terms of the need for training or retraining for part of the workforce. Well then! The response of companies and consumers to the pandemic has deepened these trends and is not expected to be entirely reversed.

A February 2021 report by the McKinsey Global Institute estimated that in eight countries (China, France, Germany, India, Japan, Spain, the United Kingdom and the United States), more than 100 million workers will have to find new, more qualified jobs by 2030. This is 25% more than they had previously projected for developed countries. Figure 2 shows their estimates of shifts in occupations by 2030, with a relative rise in healthcare and science, technology, engineering, and mathematics (STEM), while jobs in food service and customer sales and service roles decline. Less-skilled office support roles would also tend to shrink.

Figure 2 – The mix of occupations may shift by 2030 in the post-COVID-19 scenario — **Figure 2:** The mix of occupations may shift by 2030 in the post-COVID-19 scenario. *Source: McKinsey Global Institute (2021). The future of work after COVID-19, February.*

Why? Many of the practices adopted during the pandemic are likely to persist. Where done, consumer surveys indicate that sales via e-commerce, which have grown substantially during the crisis, are not expected to shrink too much. Also, remote work will not be fully reversed, with the hybrid organization of work processes becoming more common. The fact that employees in remote occupations have worked more hours and with greater productivity during the pandemic will encourage continued telework.

McKinsey suggests that changes in “work geography” will have consequences for urban centers and workers employed in services, including restaurants, hotels, shops, and building services—25% of jobs in the United States before the pandemic, according to David Autor and Elisabeth Reynolds (The Nature of Work after the COVID Crisis: Too Few Low-Wage Jobs; July 2020). Indeed, demand for local services in cities has dropped dramatically as remote work has increased, regardless of confinement.

Autor and Reynolds indicated four trends for the world of work after the pandemic. In addition to automation, they highlighted the increase in remote work, the reduction of density of workplaces in urban centers, and business consolidation. The latter is due to the growing dominance of large firms in many sectors, something exacerbated by the bankruptcies of smaller and more vulnerable companies.

All these trends have negative impacts on low-income earners and the distribution of income. They tend to increase the efficiency of processes in the long run, however, leading to harsh consequences in the short and medium terms for workers in personal services, who are generally not present among the highest paid. Workers at the top of the wage pyramid, including professionals in STEM, will see their opportunities grow.

Technological progress is one of the main causes of the increase in income inequality in advanced countries since the 1990s. The acceleration of inequality with the pandemic therefore tends to intensify the challenges. In a way, it can be said that the pandemic is accelerating history, rather than changing it.

The role of public policies will be central in the post-COVID-19 world, both in strengthening social protection—including through unemployment insurance and income transfer programs—and in the requalification of workers. Instead of denying technological advancement, it is better that public authorities help people to adapt, minimizing the resulting scarring.

Otaviano Canuto, based in Washington, D.C, is a senior fellow at the Policy Center for the New South, a nonresident senior fellow at Brookings Institution, an adjunct assistant professor at SIPA – Columbia University, a professorial lecturer of international affairs at the Elliott School of International Affairs – George Washington University, and principal of the Center for Macroeconomics and Development. He is a former vice-president and a former executive director at the World Bank, a former executive director at the International Monetary Fund and a former vice-president at the Inter-American Development Bank. He is also a former deputy minister for international affairs at Brazil’s Ministry of Finance and a former professor of economics at University of São Paulo and University of Campinas, Brazil.

Banking

Top 7 Factors to Consider When Choosing a Bank

ByCFI.co

Are you looking for a new and trusted bank to handle your financial services? Choosing a bank isn’t always easy. While it’s tempting to just go with the bank that you’ve always used, when your financial needs change, you need to look at your options to find the best one for you.

But how do you choose? What should you keep in mind when you need a new bank?

We have a few factors for you to consider. Keep reading to learn more so you can find your new bank with ease.

1. Your Banking Needs

So what kind of bank are you looking for, anyway?

Depending on your specific needs, you might choose banks that cater to them. For example, are you looking for a basic business bank account, or is this for your personal bank account?

Are you trying to combine the two?

When you’re looking for a bank, don’t be afraid to ask about how they treat each kind of account and the specific benefits that they offer that relate to these accounts.

If you have a business in need of a bank, what kind of support does the bank offer? Are there staff members available that can advise you on business growth? Can the bank scale with your business?

A great personal bank doesn’t equal a great business bank. While many banks offer adequate services for both, it doesn’t hurt to check.

2. Bank Perks

Many banks offer great perks to new members, and there’s nothing wrong with trying to take advantage of them. What is your bank of choice willing to offer you?

Some banks offer a money bonus (like a gift card) when you join. Others may have discounts on hotels, transportation, or other necessities that are exclusive to their members.

Bank perks shouldn’t be your primary decision-makers, but they don’t hurt.

3. Your Credit Score

Did you know that some banks filter clients based on their credit scores? While having a normal credit score is often enough, some banks may favour you if you have a high credit score.

Credit requirements often only apply to people who are trying to open a business account. The bank wants to ensure that you’re a secure client, and they have enough clients that they’re able to pick and choose.

Before you choose a bank, check on credit requirements and work on building or maintaining your credit score.

4. The Locations (or Lack Thereof)

Are you used to having a bank that’s in a brick and mortar location? There are a few things that you want to keep in mind when you’re trying to choose in that case.

First, how accessible is the bank for you? Are there multiple locations that make it easy to access your required services on the go?

It’s a good idea to choose a bank that has a location somewhere that you frequent. For example, many grocery stores have banks nearby or even within the building for easy access.

Also, keep ATMs in mind. It’s annoying to find yourself needing to withdraw money only to be hit with ATM fees because your bank’s ATM isn’t available. If there are insufficient bank or ATM locations and you’re someone that spends a lot of time travelling around, you might want to consider another bank.

That said, it’s getting more popular for banks to move online and get rid of brick and mortar options. Consider whether or not you’re comfortable with this.

These online banks are easy to access wherever you are, but when it comes to withdrawing cash without fees, they’re lacking. While they often offer easy online support and chat options, they also don’t have the in-person interactions that many people rely on.

If you value personal connections and the ability to go to a physical location to get help or withdraw money, in-person bank services might be best for you. If you value ease of use and accessibility, online banks are also great.

5. Digital Options

Most banks, even if they have a “real” location, also offer digital services. This combines the in-person features of a brick and mortar bank with some of the accessibility and perks of an online bank.

When you’re looking into your bank, ask about their digital services.

Some smaller banks have insufficient digital options. Their sites might be clunky, slow, or difficult to use, and they sometimes don’t have all of the features of larger bank websites.

This doesn’t make small banks bad, and it doesn’t mean that all small banks have problematic websites.

A good bank website should allow you to get support, check your bank statements, move money around for online purchases or transfers, and make it easy to open up secondary accounts (like savings accounts). If you have a specific digital service in mind, ask about it before you make your choice.

6. Savings Account Options

Speaking of savings accounts, they aren’t all the same.

While safety is the primary concern with a savings account, you should also look into interest rates. A savings account with a strong interest rate can protect your money (in a small way, at least) against inflation.

A good savings account works as a slow investment. An account with no interest (or low interest) should be a red flag.

7. Basic Services

What kinds of common banking services are you looking for from your new bank?

Regardless of whether the bank is for business or personal use, you want to know that you’ll be able to access the services that you rely on for your banking.

For example, are you someone who likes to have a tax professional on hand? Good bankers are often able to handle difficult tax questions and concerns. How does this bank handle loans?

There are plenty of services that you want to keep in mind when you’re choosing a bank. Make a list and compare it against the services listed on their website, or call to confirm.

Choosing a Bank Isn’t as Easy as It Seems

There are plenty of options for banks, more so now that online banks are so common. This makes choosing a bank confusing and sometimes overwhelming.

If you keep these factors in mind next time you’re trying to set up a new bank account, you’ll be one step closer to finding a bank that you love and trust. Choosing a bank is a big commitment, so don’t take it lightly.

Are you looking for more helpful financial resources? Check out our journal for everything that you need to know to stay updated on business, economics, and finance.