In a statement, the company said Australian households have “racked up record levels of debt” due to low interest rates, but many lenders “still over-rely on the poverty-level HEM benchmark that underestimates true living costs”.
Moneysoft chief executive Peter Malekas said this was just one of a number of “disturbing issues” uncovered by the royal commission that will “inevitably lead to widespread and much-needed reform” across the industry, but advisers should look to act sooner rather than later.
“We shouldn’t wait for the final report in 2019 to reassess what we do and how we can better serve clients now,” he said.
“Budgeting is one of the top two unmet advice needs of everyday Australians, according to Investment Trends research, however many financial planners are still concerned about turning that demand into a sustainable and scalable service.”
Mr Malekas said advisers should be looking to assist their clients manage their cash flow to help them address their debt levels.
“Without the guidance of a trusted financial planner, many people’s debt woes are likely to grow,” the statement said.
“Australians’ household debt to income ratio now stands at a record 188.6 per cent. Around three in 10 households (29 per cent) were classified as ‘over-indebted’, with mortgage holders and high-income earners particularly susceptible, according to ABS data released in late-2017.”
Dont see the problem with this – and I dont use Moneysoft software.
Our industry is littered with trying to complicate matters for clients.
For my debt / wealth accumulation clients I try and give them one take away from my meetings. Either what their bank account balance or the size of their mortgage needs to be by the time of our next meeting. If it isnt we relook at their past year and work out where it went wrong (or right). This makes the client accountable for the information they tell us. If they tell us they spend $60,000 but the outcomes shows they spend $90,000 they need to explain – or we change the future and demonstrate how $90k impacts their financial position. And it doesnt cost any more – in fact I find my meetings are shorter as a result – because we are focusing on what matters to the clients.
Next were going to have to hold their hand when they go to the toilet…….People need to look themselves in the mirror and see their true reflection and wake up to what they see.
What the? This is turning into farce and dissipating into nothing. The Royal Commission now appears to be pick at straws with losers for the prosecution being wheeled in who have made poor business decisions. The old adage is that you can lead a horse to water etc
Another self interested advertorial. Do moneysoft pay for advertising in the IFA?
Or we could do a bugeting service as well , charge em an additional $1500 upfront plus $50 per week like some budget companies do already , or wait buy some very expensive software …., seriously buy a book …. financial planning is too dear to clients already .
My business is based on managing cash flow as a first priority. It is hard work, requires more work but is also the most rewarding. Helping a client save 10-20% of their income is the best investment they will make. Moneysoft once again promoting their own stuff, if they promoted establishing protection portfolios I would be more pleased. The amount of self interest these days is blowing my mind
…or they will keep going until they find someone who will lend them the money and tell them it’s a really great idea.
It’s one thing telling a client to budget and keep debt manageable, getting them to follow through is another matter entirely. If a client wants to purchase a property in their preferred suburb, they will do it regardless of the conversation you have with them about not over extending themselves with debt
and then looking for someone else to blame when it goes pear shaped, just like that woman from Tassie with $3M in assets & only $800K in debt and somehow its all the banks fault that she’s now on the Disability Support Pension….hello!!