Analysis conducted by fintech firm Moneysoft has found advised clients dramatically decreased their discretionary spending over the first 12 months of tracking.
Moneysoft said in a statement that 101 of its advised clients were able to, on average, reduce their spending on irregular discretionary items from $11,400 to $5,730 after 12 months, representing a reduction of almost 50 per cent.
The most marked reduction in discretionary spending came from clients within the 25 to 35 age bracket, the statement said.
Irregular discretionary spending was defined in the analysis as items such as entertainment, travel, hobbies and existing credit card repayments.
Moneysoft managing director and founder Peter Malekas said the results represent an opportunity for advisers to offer cashflow as a service given the size and transparency of the financial benefits that can be easily demonstrated to clients.
“Reining in bad debt is one of the biggest challenges that many people will face but this new data demonstrates that it can be done,” Mr Malekas said.
“However, average expenses were still fairly flat over the first six months, showing how important ongoing tracking software combined with regular advice from a financial planner can be in cementing good financial behaviour.”
Resolution Life Australasia severs ties with AMP.
AMP and TAA have sought an increase in the cap on life insurance commissions for financial advisers.
The government has announced a post-implementation review of the removal of the stamping fee exemption.
Get the latest news! Subscribe to the ifa bulletin
Get notifications in real time and stay up to date with content that matters to you.