Greg McAweeney

Everyone wants to be happy. It has been the subject of books, films and in 2014 Pharrell Williams’ tune Happy went to number 1 in more than 30 countries from Slovakia to Spain, causing a wave of joy around the world. But one of the simple secrets to happiness, revealed today in new research, may come as a pleasant surprise to many people.

In one of the most detailed recent investigations into the link between happiness and money, the new research, released to mark the launch of the 2014 RaboDirect Financial Health Barometer (FHB) which surveyed 2,300 Australians aged 18-65, found that people who live within their means and are regular savers are happier, healthier and more optimistic than those whose spending is out of control.

But could it really be this simple? According to RaboDirect’s Group Executive Greg McAweeney, the results are convincing and also raise an interesting question about just how beneficial things such as ‘retail therapy’ and feel-good shopping to boost morale really are.

He explained, “Our research has once again shown a high correlation between financial control, savings habits and our success in the pursuit of happiness. So-called retail therapy is not necessarily bad in itself. However, the high we get from a trip to the shops is likely to be short lived if we are not living within our means. It seems that just having some money in the bank and knowing we can comfortably meet our outgoings makes us happier than actually flashing the cash.”

The RaboDirect FHB research also found that people with good financial habits may even live longer, with the benefits of living within one’s means and being a regular saver also having a profound effect on the way we view our health. People who report to be living within their means are considerably more likely than ‘out of control spenders’ to say they feel healthier than they did two years ago and that they don’t feel satisfied unless they exercise at least three or four times a week.

Mr McAweeney expanded on this. “This halo effect of good money habits extends well beyond happiness and, as extreme as it may sound, this may actually add years to your life. Regular savers are almost twice as likely to say they feel healthier than they did two years ago whilst those who live within their means are more likely to watch what they eat. This research certainly builds a compelling case for people to seize control of their financial habits and we have three years of data to prove that this is a very real phenomenon.

“There are simple steps that each of us can take to make more of our money. You don’t need to be rich to enjoy the health and happiness benefits that being in control of your finances can deliver. In fact, it isn’t about what you have, it’s what you do with it that matters. Financial control is within the grasp of most people – it’s about taking simple steps such as paying down their biggest debt first, starting a simple budget, and importantly – to spend less than you earn and tuck away the difference for a rainy day.

“You should also take a look at the products you are using to house your savings and make sure they are working hard for you – you shouldn’t have to pay fees on a true savings account and you should consider using accounts where you can restrict yourself from accessing the money immediately as it will act as a natural deterrent for over spending on a whim.”

So who are Australia’s happiest people?

The RaboDirect research also uncovered who’s doing it right, analysing the happiness levels across different demographic groups. The happiest Aussies have been found to be Gen Y men, living in NSW in homes where the household income is between $100,000 and $150,000. These happy chappies are most likely to report that they live within their means and are regular savers.

Mr McAweeney concluded by saying, “Clearly the more we earn the easier it is to live within our means but it is interesting to see that people with household earnings of between $100,000 and $150,000 claim to be happier than those earning in excess of $150,000. So there may be a glass ceiling on the ability of money to bring happiness. Our research suggests that the optimal household income for happiness is $125,000. But possibly no more.”

Table 1: The link between regular savings and well being

Table 2: Happiness by demographic groups

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Greg McAweeney

Everyone wants to be happy. It has been the subject of books, films and in 2014 Pharrell Williams’ tune Happy went to number 1 in more than 30 countries from Slovakia to Spain, causing a wave of joy around the world. But one of the simple secrets to happiness, revealed today in new research, may come as a pleasant surprise to many people.

In one of the most detailed recent investigations into the link between happiness and money, the new research, released to mark the launch of the 2014 RaboDirect Financial Health Barometer (FHB) which surveyed 2,300 Australians aged 18-65, found that people who live within their means and are regular savers are happier, healthier and more optimistic than those whose spending is out of control.

But could it really be this simple? According to RaboDirect’s Group Executive Greg McAweeney, the results are convincing and also raise an interesting question about just how beneficial things such as ‘retail therapy’ and feel-good shopping to boost morale really are.

He explained, “Our research has once again shown a high correlation between financial control, savings habits and our success in the pursuit of happiness. So-called retail therapy is not necessarily bad in itself. However, the high we get from a trip to the shops is likely to be short lived if we are not living within our means. It seems that just having some money in the bank and knowing we can comfortably meet our outgoings makes us happier than actually flashing the cash.”

The RaboDirect FHB research also found that people with good financial habits may even live longer, with the benefits of living within one’s means and being a regular saver also having a profound effect on the way we view our health. People who report to be living within their means are considerably more likely than ‘out of control spenders’ to say they feel healthier than they did two years ago and that they don’t feel satisfied unless they exercise at least three or four times a week.

Mr McAweeney expanded on this. “This halo effect of good money habits extends well beyond happiness and, as extreme as it may sound, this may actually add years to your life. Regular savers are almost twice as likely to say they feel healthier than they did two years ago whilst those who live within their means are more likely to watch what they eat. This research certainly builds a compelling case for people to seize control of their financial habits and we have three years of data to prove that this is a very real phenomenon.

“There are simple steps that each of us can take to make more of our money. You don’t need to be rich to enjoy the health and happiness benefits that being in control of your finances can deliver. In fact, it isn’t about what you have, it’s what you do with it that matters. Financial control is within the grasp of most people – it’s about taking simple steps such as paying down their biggest debt first, starting a simple budget, and importantly – to spend less than you earn and tuck away the difference for a rainy day.

“You should also take a look at the products you are using to house your savings and make sure they are working hard for you – you shouldn’t have to pay fees on a true savings account and you should consider using accounts where you can restrict yourself from accessing the money immediately as it will act as a natural deterrent for over spending on a whim.”

So who are Australia’s happiest people?

The RaboDirect research also uncovered who’s doing it right, analysing the happiness levels across different demographic groups. The happiest Aussies have been found to be Gen Y men, living in NSW in homes where the household income is between $100,000 and $150,000. These happy chappies are most likely to report that they live within their means and are regular savers.

Mr McAweeney concluded by saying, “Clearly the more we earn the easier it is to live within our means but it is interesting to see that people with household earnings of between $100,000 and $150,000 claim to be happier than those earning in excess of $150,000. So there may be a glass ceiling on the ability of money to bring happiness. Our research suggests that the optimal household income for happiness is $125,000. But possibly no more.”

Table 1: The link between regular savings and well being

Table 2: Happiness by demographic groups

The post Simple secret to eternal happiness revealed appeared first on AdviserVoice.

SMSFs putting retirees in control of there retirement funds: RaboDirect

When it comes to being ‘super’ happy in the future, having control of their retirement funding is putting those with a Self-Managed Super Fund (SMSF) ahead of the rest.

This is according to the 2013 RaboDirect National Savings and Debt Barometer which shows that respondents with an SMSF were not only happier but were in better health than those with another form of superannuation.

According to Greg McAweeney, Group Executive Manager of RaboDirect, being in control of their financial future is clearly a big driver for respondents with an SMSF. Noting that SMSFs are a rapidly growing segment of Australia’s retirement savings pools; Mr McAweeney said that the health and wellbeing benefits as suggested by the NSDB results are a compelling reason that many are turning to this option.

“While a Self-Managed Super Fund isn’t for everyone – you need a certain level of knowledge, money, time and interest to do it well – there is clearly a keen interest and appetite among Australians for this hands-on control of super and ultimately their retirement. In fact, our research shows that 14% of the nation researched SMSFs online last year.

“Regardless of where people currently have their super invested, we could all take a cue from SMSF investors by taking a more proactive approach to our financial outlook. By actively taking control of our finances, we may get some of the peace of mind and health benefits that SMSF investors enjoy. Whether that means simply starting a budget, or moving your money from a low interest account, to a true savings account, there are steps to take to be more in control of our financial future.”

“When it comes to getting your super under control, start by consolidating any super accounts and tracking down any lost super via the Australian Taxation Office. Then look at your total superannuation balance and how much you are currently contributing. Once you know this, you can also consider how your super is being invested and whether you can contribute more to your account each year. And if you are happy leaving your super to the professionals, you can apply the same suggestions to your savings account and overall savings goals.”

Mr McAweeney went on to say that with the cash hub being central to any SMSF, there are a number of key considerations that apply to those with an SMSF as well as to everyday consumers looking to make the most of their savings. Not least of which is ensuring you use the right vehicle or product to make the most of your hard earned savings.

“Just as most people have a savings account as a core financial product, the cash hub remains central to any SMSF. When interest rates are historically low, as they are now, it is even more important that investors get the most from that cash hub account. This means doing the adequate research to find a product that will ensure they are maximising returns.”

“A typical SMSF holder is attracted by choice as much as control. They should look for market-leading online savings and term deposit options or other high-interest accounts that offer flexibility and no fees. At the end of the day, being in control often means making decisions – so arm yourself with as much information as possible to ensure you make the right financial decisions.”

Key findings

Gen Y-ers looking to family, not professionals, for advice.

When it comes to money and our financial futures – who do we turn to and trust most to give quality advice?

According to the 2013 RaboDirect National Savings & Debt Barometer (NSDB), 36% of Gen Y relied on family and friends for financial advice – using their loved ones over a bank (33%), an accountant (14%) or a financial adviser (13%).

At the same time, Gen Y is the most trusting of financial planners as a source of financial advice of all the generations. However, cost appears to be their biggest hindrance to enlisting the help of a qualified financial planner, with 60% of Gen Y respondents saying they think using a planner would be expensive.

According to Bede Cronin, RaboDirect’s National Manager Key Account Services, these statistics highlight the need for greater awareness of the benefits of financial planning compared to the actual costs of obtaining it.

“While it is certainly encouraging to see that financial matters are being discussed with friends and family instead of being treated as a taboo topic, it is still important to enlist the help of a qualified professional to ensure that advice is sound and tailored to individual circumstances,” Mr Cronin said. “In light of Gen Y’s perception that financial advice is expensive, seeking free advice from family and friends may be viewed as the better option, however, when it comes to your financial future we would always recommend seeking tailored professional advice.”

Based on the NSDB results, RaboDirect is encouraging financial planners to confront the perception that advice is too expensive and demonstrate the role they can play in developing long term strategies to deliver financial security.

“Our findings reveal a clear opportunity for planners to engage with younger generations to teach them about the value of financial planning and show them the benefits that come from investing in their financial wellbeing. From the work our Key Account Services team does partnering with financial planners to deliver savings and cash investment solutions to clients, we know that many financial planners do an excellent job in building lasting relationships with clients. The opportunity for all planners is to not just develop strong relationships for older generations but to develop a clear plan for engaging Gen Y also.

“Gen Y needs to understand that financial advice doesn’t have to be complex and costly. It can be simple, affordable and deliver better financial outcomes than would be achieved in the absence of professional advice. And with more than a quarter of Gen Y saying they think they will run out of money during their retirement, it is never too early to enlist the help of a professional who can design an appropriate financial plan to set you up for the future,” Mr Cronin said.

While there was some discrepancy in the survey among generations over who they trusted most for financial advice, the support for financial literacy/language being taught at schools was universal across the generations.

“Financial literacy is obviously a very important topic for all Australians and we should be doing all we can to encourage people to engage with their finances at a young age. Knowledge is key. And with a firm understanding of financial terms and concepts, we would hope to see the number of people who see financial planning daunting – currently around a third of respondents – drop significantly.

“We support initiatives that help to raise levels of financial literacy and designed the National Savings and Debt Barometer to drive important conversations among consumers about the importance of saving as well as the value of trusted professional advice.”

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Gen Y-ers looking to family, not professionals, for advice.

When it comes to money and our financial futures – who do we turn to and trust most to give quality advice?

According to the 2013 RaboDirect National Savings & Debt Barometer (NSDB), 36% of Gen Y relied on family and friends for financial advice – using their loved ones over a bank (33%), an accountant (14%) or a financial adviser (13%).

At the same time, Gen Y is the most trusting of financial planners as a source of financial advice of all the generations. However, cost appears to be their biggest hindrance to enlisting the help of a qualified financial planner, with 60% of Gen Y respondents saying they think using a planner would be expensive.

According to Bede Cronin, RaboDirect’s National Manager Key Account Services, these statistics highlight the need for greater awareness of the benefits of financial planning compared to the actual costs of obtaining it.

“While it is certainly encouraging to see that financial matters are being discussed with friends and family instead of being treated as a taboo topic, it is still important to enlist the help of a qualified professional to ensure that advice is sound and tailored to individual circumstances,” Mr Cronin said. “In light of Gen Y’s perception that financial advice is expensive, seeking free advice from family and friends may be viewed as the better option, however, when it comes to your financial future we would always recommend seeking tailored professional advice.”

Based on the NSDB results, RaboDirect is encouraging financial planners to confront the perception that advice is too expensive and demonstrate the role they can play in developing long term strategies to deliver financial security.

“Our findings reveal a clear opportunity for planners to engage with younger generations to teach them about the value of financial planning and show them the benefits that come from investing in their financial wellbeing. From the work our Key Account Services team does partnering with financial planners to deliver savings and cash investment solutions to clients, we know that many financial planners do an excellent job in building lasting relationships with clients. The opportunity for all planners is to not just develop strong relationships for older generations but to develop a clear plan for engaging Gen Y also.

“Gen Y needs to understand that financial advice doesn’t have to be complex and costly. It can be simple, affordable and deliver better financial outcomes than would be achieved in the absence of professional advice. And with more than a quarter of Gen Y saying they think they will run out of money during their retirement, it is never too early to enlist the help of a professional who can design an appropriate financial plan to set you up for the future,” Mr Cronin said.

While there was some discrepancy in the survey among generations over who they trusted most for financial advice, the support for financial literacy/language being taught at schools was universal across the generations.

“Financial literacy is obviously a very important topic for all Australians and we should be doing all we can to encourage people to engage with their finances at a young age. Knowledge is key. And with a firm understanding of financial terms and concepts, we would hope to see the number of people who see financial planning daunting – currently around a third of respondents – drop significantly.

“We support initiatives that help to raise levels of financial literacy and designed the National Savings and Debt Barometer to drive important conversations among consumers about the importance of saving as well as the value of trusted professional advice.”

The post Advice conundrum – Gen Y trust financial advisers but view as too expensive appeared first on AdviserVoice.

Australia’s savings on the increase.

Australians have learnt a valuable lesson from recent tough economic times, and have been busy squirrelling away savings in order to protect themselves from any further uncertainty; RaboDirect research shows.

Impressively, almost a third of Australians have a savings safeguard that would last them at least seven months if they had to live off it – up from 19% in 2012 to 29% in 2013. And at a national level, the average savings buffer increased by 43 days last year – giving people at least an extra month to live off in the event they lost their job.

The findings paint a much rosier picture of the nation’s savings habits and outlook compared to just over one year ago when almost half of Australians were living on the brink and had one months’ savings or less worth to live off if they lost their job.

According to RaboDirect’s Group Executive Manager, Greg McAweeney, while it is important to be prepared for the unexpected, it isn’t about focusing on the negatives but about positively planning for the future.

“When viewed on a global economic scale, Australia came out of the financial crisis looking pretty good, particularly compared to parts of Europe and the United States. That being said, we saw the national unemployment rate rise to 5.8% in November 2013 which begs the question, are we out of the woods just yet?

“Our latest national research shows that 17% of Australians said they had felt the effect of an involuntary loss of employment in their household in the previous 12 months. It’s unfortunate that the research also indicates that those who are already struggling are most likely to have felt the impact of the tighter job market.

“While no one can say exactly what the future holds, we should focus on the things we can control such us our individual savings habits. And being in control of this can also provide peace of mind. In fact, at least a third of the population say that they are putting money aside because savings make them feel more comfortable,” Mr McAweeney said.

So what do our current savings habits say about us?

Saving more helps us deal with the dreaded d-word

In the past few years Australians have made a name for themselves as good savers. A fifth of the population is saving between $200 and $500 each month – or $2,400 – $6,000 a year. That equates to a new plasma TV or a round the world trip for two each year! At the same time, we also felt better about dealing with debt, with 23% in 2013 saying they feel very comfortable about paying off debt.

We’re savvy savers but are still falling prey to the wrong savings products

Average savings balances have increased to $1,995 in 2013 up from $1,396 in 2012. However, we’re still falling trap to zero or low-interest accounts that do nothing to boost our savings, and often end up costing us money with fees and fines.

“Unfortunately too many Australians – 85% of the nation in fact – are missing out on millions of dollars in interest by leaving their money laying idle in everyday transaction accounts. We know the average balance sitting in Australians’ accounts is residing in an everyday transaction account, and in 2013 compared to 2012 this has increased by a whopping 42.9%,” Mr McAweeney said.

We’ve all got our reasons for penny pinching

According to RaboDirect, the top three reasons for saving are: to feel more comfortable; to save for a holiday; and to have money in case of emergency.

Additional key findings:

RaboDirect survey finds correlation between savings regularity and happiness.

While money itself may not be enough to buy happiness, regular saving habits can literally see people laugh all the way to the bank according to the 2013 RaboDirect National Saving and Debt Barometer (NSDB).

The research found that regular savers[1] can bank on happiness and good health, uncovering a direct correlation between savings regularity, happiness and health. An estimated 62% of regular savers report that they are completely happy with their life, well above the national average of 48%. Meanwhile, only 19% of ‘unrestrained spenders’[2] say they are completely happy.

And it’s not only mental wellbeing where regular savers lead the way, 56% of regular savers say they are in excellent health, more than double the amount of ‘unrestrained spenders’ who say this (26%).

Commenting on the findings, Greg McAweeney, Executive General Manager of RaboDirect, said: “We’ve always had our suspicions that regular savings habits could put a smile on the dial and now we have the proof. And it’s also interesting to note the link between savings and health. Just like you need regular exercise to keep fit and healthy, you can keep your finances in shape by taking steps like setting a savings goal, writing down a budget or moving your savings into a high interest savings account.

“It’s great to see that there are more Australians saving each month than in past years, however there is definitely room for improvement and our barometer research gives people good reason to kick start their savings habit. It’s not about how much money you have, it is what you do with it. So just by controlling the things you can control – such as your own personal saving habits –you could end up happier than ever before.

“For the 76% of Australians who haven’t yet established a regular savings plan and may need some extra help getting financially fit, consider seeking tips from a professional. A CERTIFIED FINANCIAL PLANNER® can act as your personal finance trainer. As our research findings show, a strong saving habit can see you healthy, wealthy and happy.”

Other key findings from the NSDB:

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Saving for Christmas starts early and budgets expected to be lean.

It may be a common gripe that Christmas comes earlier each year but new research has revealed that Christmas budgeting has already been underway in around one in five households since October.

The research comes from the 2013 RaboDirect National Savings and Debt Barometer (NSDB), an extensive study of Australians’ attitudes towards money and savings. The findings of the latest NSDB point to a lean Christmas for many with budgeting, bargain present shopping and agreeing a giving and receiving strategy between family members a key part of the planning process.

The survey found that Gen X were most likely to be planning for Christmas in October (22%), followed by Gen Y (16%) and Baby Boomers (15%).

The most common way of planning for the festive season was to set a budget ahead of time (58%). Additionally, 42% of people who started their planning early have already made a start on their Christmas shopping. For one third of people (32%) already planning Christmas, agreeing the giving and receiving strategy between family members had already been addressed back in October.

With Australians already expected to spend an estimated $42 billion this Christmas[1], planning ahead will be crucial to avoid a last minute impulse overspend during the holidays, says RaboDirect Executive General Manager, Greg McAweeney:

“As a nation, we will be spending upwards of $40 billion this Christmas. That is a vast amount of money – in fact; it would be enough to end world hunger for 12 months if it was instead donated to charity. Or if you break it down further, this estimate amounts to about $1,800 per person – which could buy 20 Christmas turkeys; or an overseas airfare; or 90 trips to the cinema. With that in mind, it is heartening to see that one in five Australians are proactively planning to spend consciously and avoid impulse purchases during the festive season.”

Mr McAweeney commented that this trend reflects a change in sentiment that has been observed through many facets of the RaboDirect NSDB research. “This year we have seen a trend for Australians to be more engaged with their money – whether that means planning a budget or knowing their rates on accounts. A lot of people have been lacking confidence in the economy and as a result, their own financial circumstances. This has led to people taking greater financial control, and having a plan for Christmas is one such example of how people are becoming more engaged with their finances.”

Key findings amongst those who have started planning for Christmas:

• Gen Y was more likely than Gen X or Baby Boomers to set expectations with family members about gift giving (40% versus 28% for Gen Y and Baby Boomers).
• Gen X was most likely to have started their shopping early (46%) compared to Gen Y (40%) and Baby Boomers (38%)

Mr McAweeney concluded, “Having a plan in place helps people to keep their finances on track, whether this is a savings goal or setting spending limits. This is particularly important at a time like Christmas where it is very easy to fall victim to impulse spending. If you haven’t started thinking about your Christmas gift buying yet, it’s never too late to start. The cost of entertainment, presents and hosting Christmas quickly mounts up so establishing spending plan will help ensure that Santa is the only one in the red on Christmas day.”

Few boomers have confidence recent changes will have positive outcomes for super.

Only 19% of Baby Boomers say recent moves to increase super contributions will give them more confidence in their ability to fund their retirement dreams according to the 2013 RaboDirect National Savings and Debt Barometer (NSDB), launched yesterday.

The survey of 2,322 Australians aged 18 to 65 also revealed the extent of the gap between average current superannuation pot ($180,467) for Baby Boomers and what they anticipate they will have at retirement ($316,666). And this latter figure falls worryingly short of the amount people feel that they would need to live 20 years in retirement ($749,824).

RaboDirect’s General Manager Greg McAweeney commented, “The retirement shortfall is worsened by the fact that, generally, people aren’t planning for the improvement in life expectancy. For instance people who are now 65 are expected to live until 85 for a man and 87 years for a woman and this equates to 20 years in retirement. And if you are younger than 65 you will live even longer than 20 years in retirement.”

The NSDB also found that almost one third (29%) of the Baby Boomer generation expect to have a mortgage when they retire. A large proportion are banking on super to repay this debt (25%) and for a further 33%, downsizing will hold the key to clearing their current mortgage and allowing them to enjoy their retirement mortgage free.

Levels of concern around mortgage debt post retirement are also high according to the study – more than half of Baby Boomers (54%) report that they are ‘quite’ or ‘very’ concerned about the prospect of retiring with a home loan.

While these findings may paint a seemingly bleak picture for retirees, Mr McAweeney says that awareness is necessary to encourage action and for people to think about how best to address the problems they are facing.

“It’s only with planning ahead, and having a clear understanding of their financial position heading into pre-retirement and retirement, that people can then start to think about solutions. Those who are a number of years away from retirement still have time to consider alternative savings strategies so they can avoid selling their homes or dipping into their super unnecessarily,” he said.

In other findings from the study released today, close to half of Baby Boomers (48%) expect to run out of money during retirement and say they will need the Aged Pension.

“For those who are facing the probability of drawing an Aged Pension later in life it is particularly important to look at ways of making their savings work as hard as possible now and really preparing for their retirement date,” Mr McAweeney commented.

Key findings:

The study found that many Baby Boomers are already living on a tight budget. More than seven in 10 (72%) Baby Boomers are reducing their power usage to save money and 68% are doing their own odd jobs rather than employing a tradesman.
Despite high levels of concern amongst Baby Boomer mortgagees, a significant proportion does not know what the rate is on their mortgage (16%).

In the current study 48% of Baby Boomers said they expected to run out of money during retirement. This is down from 57% last year, indicating an increase in confidence for this group.

Mr McAweeney concluded, “We conduct the National Savings and Debt Barometer to encourage people to become more engaged with their money so they can plan ahead and make the most of what they’ve got. For example, we know that Aussies are losing out on billions of lost interest by leaving their money in low interest accounts – the survey this year found that the average balance sitting in Australians’ transaction accounts has increased by 42.9% (from $1,396 to $1,995). By moving some of this excess money from a transaction account into a true-to-label savings account, Australians can make their money work harder for them and can truly experience the benefits of compound interest. This will give people greater financial freedom and more options in retirement.”

The new type of account to RaboDirect, called Notice Saver, was developed in response to the insight that keeping some cash at arm’s length would ease the pain the for business owners when the big bills needed paying and would also help customers who wanted the security of a term deposit but with greater flexibility.

Greg McAweeney, Group Executive of RaboDirect Australia and New Zealand, explained:

“Notice Saver is not quite a High Interest Savings Account, nor a Term Deposit. It gives the high interest, fee-free benefits customers expect from RaboDirect – with a differentiating feature designed to improve budgeting, and that is the requirement to serve a notice period before withdrawing funds  31, 60 or 90 days, depending on the type of Notice Saver account chosen” Mr McAweeney said.

Unlike a Term Deposit, this isn’t an investment period but rather the amount of notice that must be given before funds can be withdrawn. Also, unlike a Term Deposit, it has a variable interest rate, tiered depending on the balance. 

“Notice Saver offers advisers a new option for their customers to diversify their portfolio further, With the flexibility of accessing their money with a specific notice period, but because the funds are tied up during the notice period, it offers very competitive rates of interest.  Best of all funds can be topped up at any time, so you can keep adding to your buffer and essentially reach your savings goals sooner,” Mr McAweeney said.

For advisers looking to recommend the best solution to clients in terms of their core cash holding, the Notice Saver accounts offer a unique solution.

“With official interest rates having fallen over previous months, clients will be turning to their advisers for guidance on products to use for their cash holdings, particularly the more risk-averse clients,” Mr McAweeney said.

“With the current search for yield, it is important to also consider the other factors that will impact your clients’ overall cash balances – such as fees. Notice Saver, like all our products, carries no fees whatsoever. 

Mr McAweeney finished by saying: “empowering customers is part of RaboDirect’s DNA.”

 “We have been telling Australians to take a hard look at their banks and at whether the products they have on offer are really meeting their needs.  This is also relevant to financial advisers and intermediaries who need to advise on which solutions best suit a client’s needs. If a product benefits the bank’s bottom line more than it does your client’s, take action. It’s their hard-earned cash after all,” he said.

The most recent NSDB, which RaboDirect conducts annually, polled over 2,355 financial decision makers aged between 18 and 65, with a focus on Australians’ attitudes towards debt and savings. The survey results are weighted by gender, age and location to be representative of the broader Australian community, in line with statistics published by the Australian Bureau of Statistics.
 
According to Renee Amor from RaboDirect, over 69% of women follow a budget, compared to only 60% of men.  And this theme is reiterated when it comes to planning for the future, as 92% of women, compared with only 85% of men, believe they should be saving for retirement.
 
Ms Amor said that in the face of recent publicity highlighting the fact that so many Australians are seriously underfunded for retirement, both sexes should be looking at concrete ways to improve their financial outlook and making the most of their hard earned cash.
 
She then went on to list some simple steps to increase savings and decrease debt.
 
“It will be no surprise that effective budgeting comes in at step number one. A budget needn’t be complex, but knowing exactly how much you spend and what you spend it on is the first step to taking control of your finances and putting something aside in savings. 
 
“If you feel that you are not able to tackle your finances alone, seek advice from a professional financial planner,” she said.
 
Ms Amor said that the next step was to pay off your most expensive debt, such as your credit card, and not to be afraid to look for a better deal from your bank. 
 
“The NSDB found that men were more likely to switch banks, with 69% describing themselves as switchers, compared with only 63% of women, who were more likely to stick with the one bank.
 
“Nonetheless, it really does pay to take advantage of the best possible rates on offer for your savings, and that means using a true high interest bearing account versus an everyday transaction account, which typically pays little if any interest and charges fees for the privilege.”
 
Ms Amor also said that many Australians might be surprised to hear that collectively they are missing out on around $3.5 billion in lost interest every year by keeping their money in no- or low-interest bearing accounts.
 
While high interest bearing accounts cannot take the place of everyday transaction accounts, they can help savings grow faster.  Term deposits can also be a good option, as they provide a guaranteed return as well as higher interest rates. 
 
“In the better term deposits, there is the option of taking interest monthly, quarterly or half yearly, so locking funds away on a secure term still allows access to the interest,” she said.
 
Ms Amor finished by saying that even though 42% of women compared with 35% of men reported that dealing with money was stressful, following these few simple steps could reduce anxiety.
 
“Many Australians are already trying to do the right thing by saving. I would just like to encourage them to put their hard earned cash into true high interest bearing account or term deposits.  It’s a positive step that can make a real difference.”

This event brought members of the investing and funds management community together to hear some of their peers put the case for a range of different asset classes in volatile times.

• Hyperion managing director Tim Samway, exhorting investors not to confuse due diligence with diversification – and highlighting that the Australian equity opportunities are out there for investors which examine the fundamentals and invest in quality rather than ‘rubbish’.
• RaboDirect Executive Manager of RaboDirect Australia and New Zealand Greg McAweeney, underscoring the value of certainty from cash – and urging investors to check that they are not paying unnecessary fees and choose genuine high interest savings accounts, not ordinary transaction accounts.
• Susan Buckley, Managing Director of QIC Global Fixed Interest, letting the performance of fixed income speak for itself, pointing to ongoing returns of 8% or more in recent times as some other asset classes have struggled to deliver any positive returns at all.
• Jason Huljich, CEO of Centuria Property Funds zeroing in on the lower volatility and higher returns of unlisted commercial property compared to its listed counterpart, along with its non-correlation with equities providing genuine diversification and a counter-cyclical buffer in the portfolio.