Only half of Australians feel confident managing their money
Currently only a little over half of all Australians aged 14+ (52.5% feel confident when it comes to managing their finances and investment, according to a recent report released by Roy Morgan research involving a survey of 50,000 people per annum.
The key findings showed a serious knowledge gap when it came to consumers understanding and willing to engage with financial products and a major problem in the way the system operates.
While financial confidence is in part affected by the extent to which consumers use various product, a key reason for low confidence is that one in three Australians have never spent the time to understand how financial products work - or the risks of incorrect usage.
The report also found confident to varied by increased net personal wealth with confidence the lowest among the bottom segment with an average value of $2000 and highest amongst the top 20% of Australians with an average value of $537,000 where 61% of respondents agreed with the statement that they were confident about managing their finances.
Industry Director Norman Morris has indicated that understanding of financial products should be made a priority in the new 'Financial System Inquiry' being undertaken by the government. "This whole issue of consumers an businesses needing to understand their financial choices should be a major focus of the inquiry the government has initiated," he said.
"Financial confidence can be improved through better understanding of how products work and choosing the best product to suit individual needs. There should be an ongoing focus on financial literacy and education with focus on disadvantaged groups."
Consumer advocate and marketing disruptor Mozo, supports the position that consumers need to feel informed and be able to access information easily when making decisions about financial products and hopes the inquiry will turn more attention to rate aggregators who make it easier for consumers to compare products side by side.