For many it won't come as a shock to read the findings by Roy Morgan Research regarding how confident consumers are in making suitable financial decisions appropriate for their needs. In Roy Morgan's press release titled – Consumers lack confidence in managing finances, a major issue for the 'Financial System Inquiry' to consider – the research organisation stated that 52.5% of Australians aged 14 years and over reported feeling confidence in managing their finances and investments. That implies 47.5% don't!
Roy Morgan's findings suggest that there are at least two contributing factors to this severe lack of confidence.
1) Education – the study found that 30.5% of people had never spent the time to understand how financial products work. As Foolish investors are well aware, investing and conquering your financial goals requires a never-ending learning process.
2) Wealth – the study also found a correlation between confidence in managing ones finances and levels of wealth. For the lowest percentile of wealth (averaging $2,000) confidence was just 41.3%, while for the highest level of wealth (average $573,000) confidence was 61.7%.
The findings highlight how many investors can benefit from different forms of professional financial services. These services can come in many forms. Financial advice such as those provided by Yellow Brick Road Holdings Ltd's (ASX: YBR) network of financial planners is one. Another is via a fund manager such as Platinum Asset Management Limited (ASX: PTM), who can be delegated the responsibility for portfolio management. Alternatively the services of a firm such as AMP Limited (ASX: AMP) can be retained to provides both financial advice and fund management services.
Foolish takeaway
There is no time like the present for investors to seize their financial future and educate themselves about their finances. Whether it is the stock market, property market or cash equivalent markets – no market is safe for an investor who doesn't know what he or she is doing.
Of course, we should also add a shameless plug for our own Motley Fool Share Advisor – where we aim to educate, amuse and enrich Australian investors! Why not join us?
