ASIC today released the Australian Financial Attitudes and Behaviour Tracker (the Tracker), a new piece of research that explores some key financial attitudes and behaviours of Australian consumers and investors.

An important initiative under the National Financial Literacy Strategy 2014-17, led and coordinated by ASIC as the responsible Australian Government agency, the Tracker will also inform and support ASIC's efforts to promote investor and financial consumer trust and confidence.

ASIC Deputy Chairman Peter Kell noted that over time the Tracker will help build up a picture of trends in Australians' financial attitudes and behaviours.

‘This research explores key actions taken by consumers and investors over a six month period on aspects of money management such as budgeting, saving, short and long-term planning. It also provides a useful picture of how Australian consumers understand key investment concepts,’ Mr Kell said.

‘What we learn from the Tracker will help us shape ASIC’s financial education and communication strategies. The Tracker also highlights areas of potential consumer vulnerability and risk that ASIC will factor into our enforcement and regulatory work,’ Mr Kell said.

The first wave of the Tracker was conducted in August 2014. The findings reflect Australians' financial attitudes and behaviours over the six months from March to August 2014.

Background

Australian Financial Attitudes and Behaviour Tracker – Key Findings

The findings of the first wave of the Tracker , which will serve as a benchmark for future waves, showed that a range of factors were associated with particular behaviours, including life stage, gender, household composition, retirement and income; and that attitudes play an important role in people's financial decisions and behaviour.  Key findings include:

• Nearly all surveyed Australians said that in the last six months they kept track of their money in some way (90%). The most commonly used methods were checking bank statements (59%), checking credit card statements (47%) and keeping receipts (39%).
• Under 35s were significantly more likely than those aged 55 and over to have kept track of their money in their head (28% and 16% respectively) and used an app to keep track of their spending (12% and 1%).
• Only 38% of surveyed Australians said they had a short-term (3-5 years) financial plan in place. Of these, 36% had not monitored their progress over the past six months. Even fewer (22%) reported having a long-term (15-20 year) plan in place. Of these, the majority also had a short term plan (74%).
• When asked about the concept of the ‘risk/return trade-off’, 41% of those surveyed indicated they hadn’t heard of it; 28% indicated they had heard of it but didn’t really understand it; and 9% of the 30% who claimed they understood the concept of risk-return trade-off were unable to accurately describe the concept when tested.
• Of the third (35%) of surveyed Australians who said they held investments other than superannuation and/or their home, 1 in 10 (10%) said they'd invested in something they didn't understand in the past six months.
• Most Australians who have a partner discussed their finances with them in the past six months (88%). Females (32%) were significantly more likely than males (19%) to openly discuss their household finances with their parents or family and were indicatively more likely to discuss household finances with their children (18% and 12% respectively).
• 4 in 5 (82%) Australians reported saving some money within the last 6 months. Of those, most (38%) indicated that they saved their money into a savings account not automatically linked to their pay. Around 1 in 5 (21%) used overpayments on home loans and 14% used voluntary super contributions as ways of saving money.
• The majority of people (90%) stated they could cover three months' living expenses in some way if they suffered a sudden loss of income. Around half (54%) indicated they would be able to cover this using their own savings and investments. However one in five ( 21%) did not know how they would manage, yet would find way; and 10% did not think they would be able to cover the expenses at all.
• About a third of surveyed Australians (30%) said they found dealing with money stressful and overwhelming. Females (35%) were more likely than males (24%) to report this. Personal income and degree level education had no effect on whether people found dealing with money stressful and overwhelming.

The National Financial Literacy Strategy

Improving financial literacy is a long-term behavioural objective.  ASIC's Australian Financial Attitudes and Behaviour Tracker supports the strategic objectives of the National Financial Literacy Strategy 2014-17, particularly Strategic Priority 5: Improve research measurement and evaluation.  The National Strategy aims to improve the financial literacy of all Australians by providing a national framework for action for stakeholders across the government, business, community and education sectors, led and coordinated by ASIC, the Australian Government agency responsible for financial literacy.

The Tracker supplements existing research in the field, such as the well-known ANZ survey of Adult Financial Literacy in Australia, conducted roughly every three years since 2003.  While the ANZ survey remains the leading reference point for measuring population-wide financial literacy levels in Australia, research such as this can enable more frequent and targeted understanding of specific financial attitudes and behaviours.

Under the National Strategy, ASIC will also continue to enhance its popular MoneySmart website for consumers and investors and reach more schools through ASIC's MoneySmart Teaching program.

Download Report 419 Australian Financial Attitudes and Behaviour Tracker