ASIC’s MoneySmart Rookie education initiative aims to help prepare young Australians for first time financial decisions. Resources cover a range of topics including buying a car, credit contracts and debt, and moving out of home.

‘When it comes to money matters, first-time mistakes can have significant consequences for young people’, said ASIC Deputy Chairman Peter Kell.

‘Young people want to own cars, not huge debts. MoneySmart Rookie provides resources specifically designed to help 16 – 25 year olds make smart choices at important stages in their lives.’

MoneySmart Rookie also offers educational topics and videos for community, not-for-profit and government outreach organisations working with young people.

For further information and to access resources, visit ASIC’s MoneySmart website.

The post ASIC to launch tools for first time financial decisions appeared first on AdviserVoice.

Robert Drake, ASIC’s Senior Executive – Financial Literacy said, ‘The calculator is a great tool if you or someone in your family is considering a reverse mortgage. It allows you to test ‘what if?’ scenarios and to understand the financial implications before you decide.’

The calculator shows how much your debt may increase over time and what this may mean for your equity in your home. It also shows how your home equity can be affected by changes in interest rates and house prices over future years.

‘A reverse mortgage allows you to borrow money using the equity in your home as security. You need to be at least 55, often older. You generally don’t need to make any repayments until you sell the house or die.

‘If you decide that a reverse mortgage is the right way to go, you can also use the calculator to explore how much to borrow, including how much as lump sums and how much as monthly payments’.

The calculator has been developed in response to recent legislative changes which will require lenders and mortgage brokers to show customers a range of scenarios using MoneySmart’s reverse mortgage calculator. They must also provide a copy of the projections to the consumer before assessing whether the proposed loan would be unsuitable.

MoneySmart’s tips on reverse mortgages include:

• Be wary of borrowing the maximum – The more you borrow, the more quickly your debt will grow. Leave plenty of spare borrowing capacity in case you need it in future.
• Check the fees and charges – Reverse mortgages charge a higher interest rate than regular home loans. Ensure you understand the total fee package, including establishment and ongoing fees. Ask if you can pay the loan off early and if there are any extra fees involved.
• Ask if there are special terms and conditions – These may restrict what you can do with the money. Find out what happens if you sell your home early or if you sell it for much more than they expect.
• If things go wrong – Ask the provider if they belong to an external dispute resolution scheme, such as the Financial Ombudsman Service. Then you will know where to go if you have a problem with the scheme.

Click here to test the new reverse mortgage calculator and the full range of calculators and online tools.

The post ASIC’s MoneySmart releases new reverse mortgage calculator appeared first on AdviserVoice.

This information supports the release of ASIC’s new suite of tools to help Australians track where their money goes.

ASIC’s Senior Executive Leader, Financial Literacy Robert Drake says, ‘We suspect many households end up misdirecting thousands of dollars each year because they are not keeping track of where their money goes. As the spending clock  shows, expenses add up quickly.’

‘Our research shows many people fall into the habit of living pay to pay. That’s why we have developed a new suite of tools to help Australians take control of where their money goes week to week, so they can direct it to where it matters most.’

The tools are:

• a free smartphone app called ‘TrackMySpend’  available on iTunes
• a Managing Your Money booklet
• an online Budget Planner on ASIC’s MoneySmart website .

The TrackMySpend app can be used to record expenses on the go. The app helps the user set a realistic spending limit and stick to it. Expenses are entered by category to ensure the user’s money goes towards the things that are important.

One user said, ‘I like the ability to view my expenses as needs or wants. I could see straight away where to look for opportunities to save’ [3].

According to The Telstra Smartphone Index [4] ‘People aged between18-44 are the highest proportion of smartphone users in Australia. More than 70% of 25-29 year olds own a smartphone, followed by 69% of 21-24 year olds and 66% of 30-40 year olds.

Mr Drake says, ‘If 85% of people with smartphones use their phone on the go,[5] then we have a chance to reach these young people while they are on the move, so no expenses can slip through the cracks. The app can also help these younger demographics stick within the budget they have set for themselves, so they can save for a holiday or get rid of debt.’

ASIC’s top tips on how to take control of your money include:

• TRACK your day-to-day spending by recording what you spend over a week or a fortnight using the TrackMySpend app.
• COMPARE money in and money out over the period of a month. Put your income and expenses into MoneySmart’s budget planner and let it do the calculations for you.
• PRIORITISE where you want your money to go. Identify your needs versus wants, make savings (switch bills) and cuts (reduce the things you can live without), set savings goals and refine your budget.
• ACT to make your money work for you. Mark upcoming big bills in your calendar. Put your savings into an account that is not accessible by ATM. Stay on track by checking your budget once a year and adjusting it if your finances change. Reward yourself with occasional treats so living on a budget doesn’t feel like a chore.

The Managing Your Money booklet is a step-by-step guide to budgeting, with a lift out budget template for those who prefer pen and paper. The booklet and other publications can be ordered for free on the MoneySmart website.

The Budget Planner on MoneySmart’s website  is the most popular tool used by 28,000 people each month.

[1] The spending clock is based on ABS Household Expenditure data
[2] Based on data from 1,400 anonymous participants who used the Money Health Check tool. Participants responded to the question, ‘Do you know what your money is spent on?’
[3] Based on ASIC user research 2012
[4] The Telstra Smartphone Index, 2011 by The Nielsen Company
[5] Research by Google and Ipsos MediaCT 2012

The post How can your clients keep track of their spending? appeared first on AdviserVoice.

A recent national survey conducted by RaboDirect revealed just how real the need is for financial literacy to be taught in schools, with Gen X and Baby Boomers outed as the generations currently struggling most with debt issues. The question then stands – would the outlook for these generations have been different if they were taught practical ways to deal with their finances from a young age?

Key points:

• 80% of Australians believe that financial literacy should be taught in schools (according to the 2012 RaboDirect National Savings and Debt Barometer)
• RaboDirect supports the work of the government in regards to teaching financial literacy in schools and calls on others to get behind the work of Moneysmart
• RaboDirect highlights the need for parents to be involved in the process of teaching kids how to deal with money and finances – parents are some of the most influential ‘teachers’ in children’s lives 
• RaboDirect also highlights the need for all Australian’s to take stock of their financial situation, and take positive steps to improve their outlook. Prepare a budget, set savings goals and start saving today.

Renee Amor, spokesperson for RaboDirect said:

“We are pleased to see today that parliamentary secretary, Bernie Ripoll, has released the details of the Moneysmart teaching aid for schools. Our research clearly supports the need for more to be done to teach Aussies how to deal with savings and debt with less than half of the population saying they are comfortable with their finances. However this kind of learning shouldn’t just be confined to the classroom – parents are some of the most influential teachers kids will ever have, so talking openly about money and teaching practical savings tips at home is also key to ensuring our future generations are financially savvy.”

“If financial literacy had been part of the curriculum when Gen X and Baby Boomers were going through school, we might find that they would have a very different financial outlook today. As it stands, our research shows that a number of Boomers are carrying debt into retirement but less than a third of this generation are actually saving for retirement. The message is simple – all Australians can take action to improve their financial well-being and you are never too young to start.”

The post Survey findings support need for financial literacy in schools appeared first on AdviserVoice.

ASIC’s MoneySmart Teaching Primary package will be unveiled in Adelaide this Thursday (9 August) at a national MoneySmart Teaching conference for primary school teachers. Resources for secondary schools are expected to be released in December.

‘Today’s young Australians live in an increasingly complex and digitally connected world with the proliferation of mobile phones and ready access to money and credit. Research shows that it is young people – particularly those aged 18 to 24, who have the lowest levels of financial literacy’, said ASIC Commissioner, Peter Kell.

‘The key to effective financial literacy education is to start young. We need to engage students and their families on a practical and accessible level – from the very beginning of their schooling.’

ASIC’s MoneySmart Teaching primary and secondary packages integrate consumer and financial literacy education into the Australian Curriculum from Foundation to Year 10 and will be trialled in approximately 90 schools nationally. Face-to-face professional learning will be provided to at least 6,000 primary and secondary school teachers between August 2012 and June 2013. Online professional learning will be available to all teachers via the MoneySmart Teaching website during the 2013 school year.

‘Through MoneySmart Teaching, students learn about saving, spending, donating and investing by applying these principles to real life. In a Year 6 mathematics unit called ‘It’s Raining Cats and Dogs…and Chickens’, for example, students learn about equivalent fractions, decimals and percentages by investigating the costs of pet ownership’, said Mr Kell.

‘MoneySmart Teaching provides an opportunity to incorporate real-life learning within the classroom and involve parents and carers more closely in this learning.’

Over the years, financial literacy has been taught to varying degrees in Australian schools. MoneySmart Teaching provides a nationally consistent approach and recognises the important role that teachers play by building their capacity to produce confident and informed financial consumers.

ASIC has collaborated with state and territory education departments and is delighted with their willingness to trial the MoneySmart Teaching package in their jurisdictions. ASIC has a National Partnership Agreement with New South Wales, Victoria, Western Australia, South Australia and the ACT. Permission has been given by education departments in Queensland, Tasmania and the Northern Territory for ASIC to work directly with schools and teachers ensuring that MoneySmart Teaching is trialled nationally.

‘MoneySmart Teaching is a key ASIC priority and we welcome the opportunity to build strong collaborative relationships with the education sector to bring about long-term generational change in knowledge, skills and behaviours’, Mr Kell said.

The post ASIC to launch consumer and financial literacy package for primary teachers appeared first on AdviserVoice.

MoneySmart’s Delia Rickard said: ‘Getting out of debt and getting sorted financially are top new year’s resolutions for many people this year. Our new budget planner can help new year resolutions come true – it reveals exactly where your money is going, whether it’s being spent on the things that are important to you, and if you’re spending more than you can afford.

‘It’s now easy for your clients to save their budget planner within the MoneySmart website or to their own computer. Then they can go back and update it as the year progresses to see if you are on track’, said Ms Rickard.

‘For people whose new year resolution is to go on a holiday, have a dream wedding or buy a new car, MoneySmart’s savings goal calculator is a handy tool. Clients can plug in their details to find out how long it will take to reach their savings goal.

‘Other people will have a simple dream to get their credit card debts under control in 2012. MoneySmart has a credit card calculator which will help them work out the fastest way to pay off credit card debt’, she said.

MoneySmart’s top five money tips for 2012:

• Create a budget to get your money sorted.
• Start paying off your credit cards (pay the one with the highest interest rate first).
• Set up a direct debit to put money into a savings account each fortnight.
• Pay extra off your mortgage while interest rates are low.
• Switch loans if you can get a better deal.

To try out the budget planner and other MoneySmart calculators, go to www.moneysmart.gov.au

The post Your clients can get a MoneyStart start to 2012 appeared first on AdviserVoice.

With considerable volatility in equity markets, many investors are looking for alternative investments, including debt and fixed interest securities. However, some of these alternatives need close scrutiny before the decision to invest is made.

ASIC Chairman Greg Medcraft said: ‘Retail investors may be attracted by the interest rates offered by household name companies and trusted brands, but hybrid securities should not be confused with government bonds or ‘vanilla’ corporate debt. In some cases investors are taking on equity-like risks but only receiving bond-like returns.

‘Investors need to understand the conditions of these offers, such as terms and conditions that allow the issuer to exit the deal or suspend interest payments, and long term maturity dates of several decades. We want to ensure consumers are fully informed before they invest,’ Mr Medcraft said. 

Consumer tips
ASIC advises consumers and retail investors who are thinking about investing in a corporate hybrid security to compare offers, read and understand prospectuses, and pay particular attention to the risks.

Most hybrid securities are likely to be sold or recommended to consumers by brokers and financial advisers. ASIC expects these gatekeepers to clearly explain the features and risks of the investments to their clients. Below are five important issues that prospective investors should make sure their broker or adviser explains:

• What are the risks of investing in this hybrid security?
• Will the returns offered adequately compensate me for the investment risks?
• How does the interest rate compare with other investments on a ‘risk adjusted’ basis? Can other less complex, risky or long-term investments provide a similar or better return?
• Will this product help the investor achieve their personal goal and objectives, and does it suit their investment timeframe and risk profile?
• Can investors exit the investment if their circumstances change?

Consumers should always make sure their adviser is licensed to provide financial advice, and get personal advice in writing (a Statement of Advice).

For information about other types of fixed interest investments and to download ASIC’s guide to investing in corporate bonds, visit www.moneysmart.gov.au

The post ASIC warns consumers about hybrid securities and notes appeared first on AdviserVoice.

The Bureau of Meteorology predicts a high risk of tropical cyclones this summer . The long-term average is twelve cyclones each season. There is also the ever-present risk of bushfires.

ASIC’s Senior Executive Leader Financial Literacy, Delia Rickard said, ‘To check your insurance covers you properly, start by checking your policy or contacting your insurer and asking them exactly what events you are covered for and what is excluded, for example damage from flooding.’

‘It’s also very important to check you have enough cover. Some home and contents policies may not cover damage from floods, or may have caps on how much you can claim for flooding and other events’, said Ms Rickard.

‘Make sure you have enough home insurance cover by using online calculators on insurance websites to estimate the total cost of rebuilding your home. Try a couple of calculators to compare because the results can differ. Be sure to shop around for appropriate cover and quotes. Phone potential insurers, and ask lots of questions’, Ms Rickard said.

Home insurance policies are usually either ‘sum-insured’, ‘extended replacement cover’ or ‘total replacement’ policies.

Sum-insured cover is more common and will cover you up to a set amount that you choose. Extended replacement cover policies have a sum-insured amount, but will provide a limited amount of extended cover in the event of a total loss. Total replacement cover covers the costs to rebuild your home to the standard it was prior to the event, thus significantly reducing the risk of being underinsured.

There are a number of variations to these basic models, so read the fine print and ask as many questions as possible when comparing insurers. The key is to be sure your policy covers all the costs of rebuilding your home.

The post MoneySmart says check your insurance cover appeared first on AdviserVoice.

The Australian Web Awards evaluates websites on criteria including visual design, content, user experience, accessibility and technical compliance.

ASIC Chairman Greg Medcraft said: ‘Over one million people have visited the MoneySmart website since it was launched in March this year. We have received great feedback from a wide cross-section of people who have used the website. It’s fantastic to also have praise from web experts and I thank the Australian Web Awards for their endorsement.’

A recent survey by Sweeney Research found that 5% of Australian internet users had visited the MoneySmart website.

Of those who had visited the MoneySmart site:

• 82% found the site useful overall
• The strongest response was for the calculators, where 91% found them useful
• 91% of users said they had taken some further action as a result of visiting the site.

The MoneySmart.gov.au website is run by ASIC. It aims to help consumers and retail investors to improve their personal finances.

The most popular topics on the website are unclaimed money, calculators, budgeting, scams and superannuation. The most popular calculators are the retirement planner, budget planner and superannuation calculator.

The post MoneySmart named best government website appeared first on AdviserVoice.

AustralianSuper today announced its support for ASIC’s new personal finance website MoneySmart, launched this afternoon by the Prime Minister, Julia Gillard.

MoneySmart aims to help people make good financial decisions by providing free, independent and unbiased information, tools and motivation and is a key part of the National Financial Literacy Strategy, also launched today.

Ian Silk, Chief Executive of AustralianSuper and a member of the Australian Government  Financial Literacy Board, said that he was fully supportive of any initiative that could improve the financial wellbeing of Australians.

“AustralianSuper is strongly committed to helping both our members and the wider community make better decisions about their financial future, and particularly their super.

“We feel that the simple and straightforward information and tools available on MoneySmart will help consumers to get better educated about their finances and help them to maximise their financial and retirement outcomes.”

Mr. Silk added that AustralianSuper has seen from experience that there is demand from consumers for tools and resources that can help them make the most of their financial situations.

“We know from the popularity of the tools on our own website, such as the Retirement Income Calculator (RiC), that consumers are looking for this sort of accessible, easy-to-use information online.

“We think MoneySmart will be a great complement to steps already taken by organisations such as AustralianSuper in the superannuation space, and will help to educate and empower the community on wider financial matters.

“We would like to encourage others in the industry to follow this lead and focus on providing clear and accessible resources, in plain language, to their customers and to the wider community.”

www.moneysmart.gov.au

www.australiansuper.com/calculators

The post AustralianSuper welcomes launch of MoneySmart.gov.au appeared first on AdviserVoice.