Financial planners should focus on money management
Financial planners should embrace technology to help their clients focus on money management as a central component of financial advice, according to Moneysoft.
Although the technology was out there, only a minority of financial planners offered money management or budgeting advice to their clients, citing concerns about the time it would take to offer such services and how to charge clients for this, the firm said.
At the same time, the lack of advice on budgeting was named as one of the top unmet advice needs for an average Australian, alongside with retirement planning, according to research house Investment Trends.
However, budgeting and money management should be offered as a part of a full spectrum of financial planning advice which already included retirement planning, insurance and investment.
Jacques Hugo, a founder of Luda Financial Solutions, which used Moneysoft’s financial technology platform allowing its clients to embrace budgeting and money management, said: “The first thing we look at is how they manage their cash because if they don’t understand their own expenditure, it undermines every aspect of financial advice and ultimately, their financial wellbeing.”
According to Hugo, the technology also provided a strong foundation for coaching his clients about money management.
“Clients receive regular, automated expenditure and budget reports ongoing, which boost their engagement, awareness and accountability,” he said.
“There is an enormous need for this type of advice - helping people to get on top of their cash flow and improving their overall financial literacy, which really should be the foundation for the provision of ongoing financial advice”.
Moneysoft, which was launched in 2012, partners with financial advisers and offers solutions for them to work with their clients in the area of money management.
Its current partnerships included Fortnum Financial Advisers, InterPrac, Clearview, RI Advice, WB Financial, Millenium3, Financial Services Partners and Centrepoint Alliance as well as broker Mortgage Choice and life insurance specialists AIA Australia.
AUTHOR
Oksana Patron
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
