The latest data from the FPA’s Money and Life Tracker, released on Monday, revealed that 70 per cent of Australians thought they could have done something to improve their financial position before the COVID crisis hit.
Among those who said they could have planned better, 20 per cent said they should have put more away for a rainy day, while 17 per cent said they should have better controlled their impulse spending. Other tactics mentioned included paying down debt more quickly and putting more money into the share market after the March crash.
FPA chief executive Dante De Gori said the crisis had highlighted the need for a proper financial plan among the general public, as this could have improved consumers’ understanding of their financial situation in many cases.
“We all know that hindsight is a wonderful thing,” Mr De Gori said. “The COVID-19 pandemic has demonstrated the need to prepare for the unexpected.”
The research highlighted the varied financial impacts of the crisis on different demographics of consumers, with 40 per cent saying they had lost income because of the pandemic and 31 per cent saying they were dipping into their savings to get by.
About 40 per cent of women surveyed and 40 per cent of those living in Victoria said they were worried about job security, while 18 per cent of those aged 18 to 24 said they were finding it difficult to keep up with expenses.
However, results had been significantly better for those who had a financial planner before the crisis, with 87 per cent of advised consumers saying they had not had to access their super to get by and 50 per cent saying they would not have done anything differently before the crisis.
“The research has shown that Australians who’ve planned for tomorrow experience greater peace of mind and wellbeing today,” Mr De Gori said.
“They are clearer on what they can spend and save and will sleep peacefully at night knowing that they have someone there to help them understand it all.”
The FPA report also underlined some of the reasons why consumers were being held back from seeking advice, with almost 30 per cent saying they believed they could handle their money themselves and 20 per cent saying they did not believe they were wealthy enough to justify a planner.
The research revealed that 13 per cent of consumers were actively planning to seek out financial advice as a result of the crisis.
It’s partially the FPA’s fault and partially planners for thinking the FPA represented them when in reality the only groups the FPA look after, are the one’s with a $60,000 cheque and a list of members names. Even today the FPA is getting a big fat cheque from Industry Super Funds and a list of names. What we’ll end up with is complex legislation for one group (that’s you) and simplified advice for Call centres. No doubt a paid survey so that Union dominated Super funds can go to Treasury and argue advice via a call centre is the only solution.
What’s the other solution for people who want low-cost advice?
“The research has shown that Australians who’ve planned for tomorrow experience greater peace of mind and wellbeing today,” Mr De Gori said.
Yeah, sounds great Dante. However, look at what is stopping people from actually getting that plan. It all comes down to costs which have increased with all of the red tape that has been introduced on your watch. Unless the Government slashes the compliance for advisers, then most people can only dream about getting a financial plan.
What’s your solution Dante?
Pander to FASEA, remain spineless and make life tougher for Planners would be the FPA solution
Did the survey ask whether the client is prepared to pay over $3,000 for their plan?
Aussies want a Financial Plan not a Statement of Advice. The government keep ignoring this by introducing more legislation and laws since 2001.
The only thing this shows is just how out of touch the FPA is with the members they represent. A basic plan to make a $500 co-contribution into super can’t be done for under $3,000 any longer.
Julie, does Commonwealth Financial Planning (CFP) still have advisers? I thought the banks got out of Advice.