In a statement, ASIC’s senior executive leader for financial literacy Miles Larbey suggested consumers begin by setting a goal using the regulator’s free mobile app, TrackMyGoals.
Consumers were then encouraged to take stock of their portfolio, including their net worth and diversification.
“By working out what you own and what you owe, you can work out how much you can afford to put towards a savings or investment plan,” Mr Larbey said.
Mr Larbey also encouraged consumers to get their debts under control, particularly credit card debt, and to evaluate their current super arrangements.
“For example, consider combining multiple super accounts to save fees, making extra contributions and reviewing your investment options,” he said.
In addition, he urged consumers to pay extra money onto their mortgage payments.
“The best way to take advantage of making extra repayments on your mortgage is to act early, especially when interest rates are historically low as they are now,” he said.
Finally, ASIC’s statement recommended consumers review their level of insurance coverage.
Mr Larbey said consumers would see long-term benefits from getting their finances in order over the coming year.
“To make 2015 your best year yet for your personal finances, make some financial resolutions for the New Year and reap the benefits over the course of the next 12 months and beyond,” he said.
…making extra repayments…especially when rates are historically low.
Agree with acting early, but when home loan rates are under 5% and returns on offer from alternative asset classes such as property and shares are well ahead of that, who says paying off the home loan when the home loan is so ‘cheap’ is a good idea?
Over the last few years, someone who let their home loan interest capitalise (or borrow more from equity to invest) or boosted sal sac instead would be WAY ahead of anyone who just put spare cash on the home loan…
Obviously needs to be suitable for each client, but this is where quality, personalised advice will beat general suggestions every day of the week.
I think a Royal Commission into ASIC would be a good place to start. Cleaning up this useless organisation would go a long way towards consumer protection and help resort consumer confidence.
ASIC has lost its way. Look at it’s of recent failures – LM Investment Mgt, Storm, Great Southern and Westpoint. Instead of monitoring corp conduct and products brought to market they have run off down the popularist path of blaming the sales channel. Why aren’t they active policing the issuance of flawed product or questioning the behaviour of organisations seeking funds or flogging product that just barely fits inside the strict letter of the law. They have instead taken on the far easier and less onerous role as market educator or a de facto consumer lobby group. Meanwhile investors continue to be parted from their money as companies go bust and ‘schemes” fail
You know…this is all stuff a financial adviser can help with….if we didn’t have to provide a mammoth advice document loaded with legalities, which scares people away, not to mention the cost associated with satisfying the regulators requirements.
A 2015 resolution for you ASIC. Find some way of making basic advice fast and easy to provide at low cost, from qualified financial advisers.