I read a disturbing research report recently from researchers at the University of Melbourne that reminded me of some very frightening stats. Almost 1 in 2 Australians have less than three months income saved. And almost 1 in 3 have less that one months’ income saved.
Not to mention that 1 in 7 have no savings at all. Basically, the majority of Australians are one or two hard luck stories away from financial disaster. Which are not new statistics. In fact, we here at No More Practice Education have been banging on about the looming economic tsunami for some time now.
But I have to wonder, how far has all the legislative change and uncertainty set advisers back from helping in this grave situation? The report cites that one of the most effective solutions for people in financial risk is FREE financial counselling.
Now it’s a very good cause, and I know the government already has a financial assistance hotline, but there is a lot more that could be done. But reality is, how can any adviser offer free financial assistance to people in need – when they are during a change so big that it has totally disrupted the business model of the majority of Australian advisers?
While the change ultimately should lead to benefits for consumers, the lack of adviser bandwidth to educate at a crucial time – while there is still time – to help get Australians back on track before any real economic downturn happens is disturbing.
Perhaps one of the biggest scary facts of the whole report was the fact that second on the list after paying for food and utilities; was the hardship of mental health issues. The lack of security and a plan around money is so debilitating that mental health is severely deteriorated. Imagine this on a mass scale when more Australians head toward retirement without a plan, let alone a property downturn that forces people’s hands’ who are over leveraged.
For we all know that without financial advice, people make wrong choices. They don’t budget. They juggle cashflow and put themselves at risk by being under-insured. They fail to pay attention to their super and they don’t know how to best utilise the pension system. So perhaps this is the not so hidden cost of advisers and their business models being under attack.
The lack of capacity to serve Australians while your focus must turn inward to survive is a huge opportunity cost. I urge each of you not to entirely forgo the educating of strangers. Keep writing your blogs. Keep publishing useful articles in your newsletters. And keep tweeting useful information that could help people.
Because while we need to grapple with a changed landscape and where it’s all headed, an Australia with your skill set is a far more prosperous place. So, hang in there – you are needed!
Until next time,
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