With consumers indicating they are more likely to save since the pandemic, advisers are recommended to check their clients aren’t letting their cash sit idle and lose value.
According to a poll on LinkedIn run by the CPA on how financial habits were changing, some 42% of users said they intended to save more following the pandemic.
A third said they were more likely to invest, 15% said no change and 11% said they were more likely to save.
Jane Rennie, general manager for external affairs at CPA Australia, said the findings indicated people were still cautious around the pandemic and advisers would be wise to reassess their client’s risk appetite.
“Saving more is a common reaction in a time of crisis, so it’s not surprising that the most popular choice was ‘more likely to save’,” Rennie said.
“This indicates that despite the end of extended lockdowns, low unemployment rates and a strong pick-up in consumer sentiment, many people remain concerned about the residual impacts of the pandemic and what 2022 may hold for them.
“Maintaining a cautious approach as we move into the next phase of the pandemic could have its downsides. In key overseas markets, such as the United States, inflation is on the rise. We’re likely to see the same trend here in coming months, although many suggest it may not be as pronounced and is expected to be temporary. This will mean, however, that the real value of money that’s sitting idle, such as savings in a bank, will decline.”
She said the proportion of votes for ‘more likely to spend’ was likely representative of pent-up demand after lockdown and would likely prove a temporary phase while those who were ‘more likely to invest’ would likely appreciate advice on their options.
The poll received almost 1,300 votes.