Nearly seven in 10 Australians do not feel prepared to make effective financial decisions, according to new research.
The 2024 MLC Financial Freedom Report, conducted by McCrindle, surveyed over 2,500 Australians to examine their financial preparedness and confidence.
The report discovered that 69 per cent of Australians do not feel prepared to make effective financial decisions, while only 31 per cent said they feel extremely or very equipped to make effective financial choices.
Moreover, just 25 per cent of those surveyed cited they are extremely or very prepared to navigate unexpected financial challenges, and a further 41 per cent worry about their finances on a regular basis.
When respondents were asked what would boost their confidence in managing these challenges, 24 per cent of Australians said they would benefit from access to financial advisers. This is up from 20 per cent in 2023.
Moreover, another 35 per cent believe having an emergency fund would boost their financial confidence, while 30 per cent said developing strong financial habits would help.
“These preferences reflect a desire for a mix of foundational financial security and the need for clear, accessible advice and resources that can guide them in making wise financial decisions through life’s challenges,” the report wrote.
Jenneke Mills, MLC head of technical services, said the research demonstrated the proportion of Australians seeking additional support to mitigate financial obstacles.
“The latest MLC Financial Freedom Report shows many Australians are vulnerable to financial shocks and believe they could be doing a better job of controlling their finances, but don’t know where to start or go for help,” she commented.
“Those who seek help for their financial needs, whether it be through tips, coaching and guidance to holistic advice, are better equipped to overcome challenges and build the security they need to take control of their future.”
MLC’s report also revealed cost of living as the most common barrier preventing Australians from achieving their financial aspirations, which impacted 62 per cent of participants.
This is followed by their current level of income (34 per cent), interest rates (25 per cent), not owning a home (17 per cent) and lack of job security (13 per cent).
According to Russell Investments, financial advisers added at least 5.7 per cent of value to clients over the past year. This is achieved by providing counsel to clients on matters such as tax planning, social security and estate planning.
This includes helping them to avoid making kneejerk decisions, reweighting their portfolios, and encouraging clients to remain disciplined.
