This week I spent time in both Sydney and Melbourne speaking to members of a large super fund who host luncheons to educate members and bring them together to create community. The fund was CareSuper, and the members ranged in ages, including those in retirement.
They were excellent forums to really listen to what was on the mind of everyday Australians when it comes to money. In fact, they were great examples of a financial institution realising the important of both talking and listening – and I was once again reminded of how much people want a safe forum to be able to discuss their money challenges.
As I talked about the principles of unlearning money – examining the habits and behaviours we have developed since childhood, which subconsciously direct the way we treat money, I could see people nodding, and come to an understanding on what may be holding them back with money. Many people came up at the end to share their individual stories with me – and they were incredibly diverse.
But there was a real theme that emerged for many in the room who were parents. There was a common fear about how their children were going to be able to afford to buy a home. Housing affordability, and what to do financially in this environment was a major concern of much of the group. And in fact, the issue ran much deeper. Really the question was – what do I tell them to do? Where should they invest? Should they go into serious debt to even try?
The bigger issue around the current environment for housing and prices in major cities is actually part of a major psychological change in this country. The great Australian dream of owning a property is out of reach for much of future generations – at least in major cities. This is not likely to change in the future either – in fact once interest rates eventually do go up, it will make borrowing for a home even more unattainable.
So how do financial advisers and the broader finance community help people change the very essence of what it means to be Australian – and the plan of save a deposit, pay off your home and have the security of property? Its a issue that is becoming more relevant as people start thinking about their own retirement plan – what to do with their large family homes that are too big as they more into retirement, whether to gift their children a deposit sooner rather than later, that still sees their kids in large amounts of debt.
Its important to start educating people on their options now. And of course, everybody has different circumstances, so financial advice becomes paramount in people getting the right plan that suits their family best. Anything you can do as an adviser to start talking about this issue, educating on possible options, and bringing people together to discuss it will certainly help. People may start to see that the Australia of the future may hold renting in better esteem and building long term wealth means becoming a dedicated investor in and outside of super without holding direct property.
Its a massive shift in the way we think as a nation, and may take 50 years to really change and develop into what we will be in the future. But without quality advice, families may make financial decisions that will negatively impact their family for generations to come. Its never been more important for advisers to play their part.
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