With many Australians facing cost-of-living challenges, a report from AIA Financial Wellbeing highlights the need for more conversations about financial wellbeing in the community, along with the crucial role financial advisers and the advice industry play in helping Australians safeguard their futures.
The company says Financial Wellbeing: The Missing Piece of the Wellbeing Puzzle explores the impact financial wellbeing has on physical and mental health, and considers the roles financial knowledge and behaviours play in financial satisfaction — and ultimately, people’s ability to lead healthy and fulfilling lives.
Pina Sciarrone, CEO and Managing Director of AIA Financial Wellbeing, says it is important to create a community dialogue around positive financial behaviours, due to the link between experiences with money and physical and mental health.
“…we see the stress and uncertainty that can arise when people are experiencing financial difficulty. We are in a time when most Australians are grappling with cost-of-living pressures and the impact of rising interest rates.”
She says this ever-changing climate creates financial pressure “…which can lead to a deterioration in physical and/or mental health.”
Sciarrone says the company’s aim is to ensure that its customers achieve peace of mind and an improved sense of holistic wellbeing which incorporates financial, physical and mental influences.
“This comes with having a plan in place, a pathway to achieve a goal — be that a savings plan, clearing debt, building wealth, a safety net for themselves and their loved ones — and a plan to improve their physical and mental wellbeing.”
The report defines ‘financial wellbeing’ as ‘the perception of being able to sustain current and anticipated desired living standard and financial freedom’, and it investigates how people think about money, how they compare money, and how they use money.
The company says it also highlights research into Subjective Financial Wellbeing – how people feel about their financial situation noting that people with the same objective financial situations can hold different views of their personal financial wellbeing.
…financial hardship… is one of the largest drivers of psychological distress…
It says that Australian household data shows that both current and previous experience of financial hardship leads to a greater risk of mental health problems. A separate study has found that financial hardship, through an inability to meet mortgage or rent payments and job security concerns, is one of the largest drivers of psychological distress.
Crucial Role of Financial Advisers
CEO of AIA Australia Damien Mu says the report highlights the crucial role financial advisers and the advice industry play in helping Australians safeguard their futures.
“Financial advisers can empower Australians to make informed decisions about their finances. We hope that this report encourages more people to consult with a financial adviser…”
Sciarrone says that AIA Financial Wellbeing believes it has a collective responsibility and opportunity to continue to support financial, physical and mental wellbeing.
She says the report findings indicate there is an important role financial advisers can play in understanding and incorporating subjective and objective financial wellbeing.
“Advisers can also drive important conversations about physical and mental health and implement a holistic advice plan. This has the potential to really shift the dial on how we think about and behave with regards to our finances,” she says.
Click here to see the full report.
