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What does being financially fit look like?

There are some distinct features to being physically fit - muscle tone, vibrant skin, great energy levels.

But what are the outward signs of being financially fit?

It is a topic we are discussing more and more with our corporate, superannuation fund and advice clients looking to improve the financial literacy and fitness of their clients.

And what is becoming very apparent in these conversations is that socio-economic status of individuals, their education and the professional nature of their employment, does not necessarily translate to financial fitness or literacy.

This observation is supported by research and when you consider the alarmingly high number of Australians who are concerned about their financial situation, you realise it is a concern that traverses the whole of society.

In 2016, we commissioned an online survey of 1,617 Australian workers aged 18 years and over to ascertain their financial fitness. All respondents were currently employed (either fulltime, part-time or casual).

The results from this research found:

  • 29% of Australians were financially unfit with a fitness level of less than 95 out of 200.
  • 32% of Australians had average financial fitness with a fitness level of between 95 to 125 out of 200.
  • 30% of Australians were financially fit with a fitness level of between 125 to 160 out of 200.
  • 9% of Australians were financially super fit with a fitness level of above 160 out of 200.

The average financial fitness of Australians is 50%, with a fitness score of 113 out of 200.

One of our corporate clients admitted they made the mistake of assuming their employees were financially fit and literate because they were professionals and tertiary qualified. In fact, they found their employees were worried about their financial health and welcomed the opportunity to take control and to be better prepared for their future.

What does financial fitness look like?

One of the major keys to being financially fit is having a plan.

The same research referred to above found Australians are almost four times more likely to be financially fit or indeed super fit when they have a comprehensive plan as opposed to those with no plan at all. When an individual engages an adviser to build a plan their level of financial fitness is 30% higher than those without a plan.

So the best way to improve the financial fitness of Australians is to ensure they can build a comprehensive financial plan, however our research reveals very few have one: 37% have no plan, 48% have a rough plan and only 15% have a comprehensive plan.

A plan gives Australians a starting point to their financial journey. Like a map, it gives them a route or pathway to reach their financial goals.

Map My Plan was created to provide the 80% of Australians who don't currently get financial advice with a financial plan.

While our research tells us only 15% of workers use a professional financial planning service, providing an accessible and reliable financial advice service that meets all the regulatory standards of a financial plan provided by an adviser, is the great opportunity to making Australians more financially fit and literate.

Financial advisers are also looking to our tool to help them service a greater audience, while others are partnering with us to help them give their clients tools than can enrich their conversations and deepen their relationship with them.

The first major step to being financially fit and literate is to have a plan. The research tells us this is a game changer. The opportunity to make financial plans accessible to all Australians is possible now, making the future of financial advice in Australia very exciting.

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