Welcome to my first blog post of 2018. For those of you who were not able to join me and Stephen Jackel (CTO) for the “What’s new at myprosperity?” Webinar earlier in the week, we have a full recording on what was covered below, but more about that in a moment.
First up, I wanted to take a quick look at how 2018 is shaping up for the Australian economy and the potential opportunities that I see facing advisors.
An unorthodox economic indicator?
As we kick-off another year (and I can’t believe it is already February!!) I wanted to take a quick look at how 2018 is shaping up on the economic front and consider the implications for the advice industry. When trying to make sense of the state of the economy in Australia and in particular, consumer sentiment (i.e how your your clients are feeling), we can turn to a number of traditional leading economic indicators that provide great insights. The one that is a little unorthodox but equally profound was last month’s announcement that Scott Pape’s book “The Barefoot Investor” ranked #1 in sales in 2017, selling nearly 450,000 copies. So it seems people’s concerns about their financial future outweighed their appetite to get immersed in a great fiction novel over the summer break. But is that any surprise?
Concern about personal finances
Last year when myprosperity hit the road in June to talk to our partners about the state of the financial advice industry, I shared some interesting statistics revealing that the average household is worried about their finances, and suggested that the financial advice industry in Australia was in fact not helping address the problem.
In an “Investment Trends” survey released in September 2016 it showed that in 2016, 92% of Australian adults were concerned about their financial well-being. That number was up from 82% just 4 years earlier in 2012. All that despite record house prices, recent retail sales showing an upward trend (1.5% increase last quarter) and with a backdrop of an unprecedented 26-years since this country last experienced a recession.
2018 is shaping up to be an interesting year with a lot of uncertainty of what’s to come on the economic front and the impact that will have on household finances. We saw in Q4 of 2017 that the housing market was definitely starting to cool and there are many concerns flying around about mortgage stress, despite the RBA adamant that interest rates will stay on hold. Wages are also growing at the slowest pace on record at about 2% per annum. On top of that people are feeling the pinch with the recent huge increases with some of our staple requirements of utilities, transport and insurance, which are the sort of things we hate blowing money on but have no choice.
The need for good advice
So are people turning to their advisor to help them navigate all this? Well seemingly not. Only 14% of Australian adults actually use a financial adviser. That’s 14.3M people unadvised in this country. And interestingly, as many as 4.3M Australians plan on conducting financial activity without the assistance of an advisor. So no wonder Scott’s book is in hot demand as people look to cheaper and more immediate sources of wisdom versus the trusted path of an advisor.
The conclusion I draw from all this uncertainty is that 2018 is going to be an awesome opportunity for advisors to get on the front foot with their clients. After all, it is the advisor that is in the best position to help the client navigate a potentially challenging year and offer peace of mind. Advisors can help clients to get their household budgets under control; make plans to help put in place some of the protections to ride through what could be a tumultuous year and offer peace of mind by having finances sorted.
So how can myprosperity help?
In speaking with many of our successful partners, it’s clear that myprosperity is a great asset to help provide certainty and peace of mind for clients, and this starts with developing stronger client engagement.
In our “What’s new at myprosperity” webinar I covered a number of new initiatives which can help you do just that.
I shared some of the recent usage statistics from clients logging into our platform through their advisors and the data clearly show that using myprosperity with your clients will help drive stronger engagement.
I also spoke about the incredible progress we’ve made with numerous new investment feeds which are all available in our Starter subscription. If you’re not already aware, advisors can roll out Starter subscription to all clients at no additional cost to their partner fee. This is a no-brainer to put myprosperity in the hands of your clients, get them involved with their finances, and again drive stronger engagement.
I also spoke about a new initiative in helping partners that want to take the leap with us and how we can now offer your own custom branded myprosperity app. Imagine your app presented in the context of the clients’ very own finances. That’s great engagement.
And finally, check out some of the great new features that our amazing development team at myprosperity have been busily building over the summer break, including cool updates to our cashflow feature allowing advisors to setup their own master spending categories. And many more great enhancements which Stephen Jackel (CTO) demonstrates in his session.
To see and hear about this in more detail, you can view a recording of the webinar here…
So that’s it for now. 2018 is going to be a huge year and we are here to help make it the year you drive client engagement through the roof and take your business to a whole new level. All the best.
Chris Ridd, CEO, myprosperity