While there is no need to push the panic button yet, it’s clear that property prices are on the way down – predicted by up to 10 per cent in both Melbourne and Sydney. For Australians, this will be a departure from the years of relying on property as the main source of building wealth.
It’s clear from our popular culture and media that property is deeply embedded in the Australian psyche. Shows like The Block, Love it or List It, and countless renovations programs all reflect what we are all thinking about – property.
But how to change this on a national level, in a world where the next generation of home buyers may never get a shot? And how do we change the mindset of those who are already sitting on large property portfolios? For some, it’s a bridge too far. Their wealth and their financial education is so tied to property that they will hang in there, through downturns and ups, because it is what they know.
But for those who are capable of change, there is a great challenge to lead them into other areas of wealth creation. While at the moment you, the advice community, are burdened with much regulatory change and education requirements, there is still the need to guide and reassure clients every day. A falling property market and tightening loan conditions from banks will mean many people will have to think differently about wealth, and their adviser is the perfect person to guide them.
It’s actually a tough job to change the thinking of a nation that has bricks and mortar in its very DNA. Here at No More Practice Education we are working on media and popular culture like reality TV to help educate people on their other options. If you didn’t see our series last year where we educated TV personality Blair McDonough on global and Australian equities, it’s worth having a watch to see how our adviser and fund managers went about the challenge.
This year we are trying a new approach to educating on choices outside of property, and have multiple advisers to help guide a new way of thinking.
There is a real opportunity to talk to people about teaching the next generation about the other wealth vehicles available – for those relying on an inheritance may well be sharing it with siblings and other family members. They won’t inherit a property outright, and won’t have enough to invest in property from the proceeds.
If you are looking for ways to educate your clients, their family, and potential clients about how to invest outside of property, here are three things you can do to help:
- Show them videos, case studies and stories around other investment success stories. If it’s in the media, people tend to give it authority and credibility. (There’s lots on our sister site: www.theinvestmentseries.com.au)
- Host information events and talk about other asset classes. Many of you already do this and invite fund managers to speak. Even if you simply use videos of managers explaining their asset class, this can go a long way towards educating people. Ask your preferred managers for access to their content, or check if No More Practice has videos you can use.
- Keep people abreast of what’s happening in property, and remind them that they are other options. Whether it be via email or social, information is power, and the more you remind people the more it will be top-of-mind for them.
The property market is falling. Perhaps this is an opportunity for people to diversify with the help of their trusted adviser.
Until next time
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