Demystifying the World of Financial Services
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“In this world, nothing is certain except death and taxes”. We’ve all heard this quote from American statesman Benjamin Franklin to which we could add a third certainty, namely that “no one cares about your money as much as you do”.
Of course, caring about it and making sensible, well-informed decisions are two quite different things. Just ask people who have been misled by unscrupulous financial advisers or who have borrowed heavily to invest on what they believed to be a “sure thing”.
These people certainly cared, but their decisions were often not based on careful research, an understanding of the connection between risk and reward, an acceptance that all markets go up and down (including shares and real estate) and an acknowledgement that every financial decision should be made with a healthy dose of scepticism.
Thankfully, most of us acknowledge our limitations when it comes to making important financial decisions. Some of us will seek professional advice to assist us through the process. The Centre’s website contains some useful education content on how you might go about doing that, especially choosing the right kind of licensed financial adviser.
Whether or not we choose to seek professional advice, the quality of our decision making will benefit (and certainly won’t be harmed) by a personal commitment to some self-education on matters financial. So how should you go about doing that without enrolling in an expensive economics, finance or accounting degree at university? Understandably, most of us won’t want to do that (and it’s not even necessary).
The starting point is the world wide web – there is an enormous number of sites which can be useful in building your knowledge and skills. The problem is to identify which ones are trustworthy and impartial. To get you going in your self-education, here’s a small selection.
Free financial literacy fundamentals
The following four sites offer comprehensive, trustworthy and free information on most of the finance fundamentals that you would ever want to know about, including budgeting, saving, investing, consumer rights, scams and tax.
This site is operated by the Australian Securities and Investments Commission (ASIC – the federal government’s financial and corporate regulator). It contains a wide range of educational, easy to read and independent material on topics as diverse as investing, borrowing and buying a car.
The Australian Tax Office (ATO) website contains a wealth of trusted and invaluable education about the tax implications of investing. As an investor it’s useful to have some knowledge of complex areas, if they apply to you, such as capital gains tax on investment properties, share trading, franking credits and reasonable deductions that can be claimed against your assessable income.
Of course, you might also be wise to consult a qualified accountant or licensed financial adviser, but having a working knowledge of the relevant tax laws in advance of your investment decisions and transactions may well save you a lot of time and money down the track.
Australian Competition and Consumer Commission (ACCC)
This is the site of Australia’s competition and consumer law regulator. As a consumer you have rights (more than most of us think we have). These rights and how to go about enforcing them are outlined on this excellent site. There’s also a wealth of material about scams on the ACCC’s Scamwatch site, including how to avoid them and what to do if you get scammed.
Australian Securities Exchange (ASX)
While we should keep in mind that the role of the ASX’s site is partly to promote the idea of investing in shares, it also contains some worthwhile educational material, including on how to get started, new listings, business news and corporate results.
Financial literacy in the media and elsewhere
The media publishes an increasing and wide variety of information on topics related to financial literacy. These include purely online sources. There is so much information available that it is hard to know which sources to trust (or waste time on). Here are a few which we think may be worth your time.
While the Australian Financial Review (AFR) is owned by a commercial ‘for profit’ organisation (and it’s important as a reader to bear that in mind), it is acknowledged as one of Australia’s leading specialist business news sites. So if you’re interested in a wide range of opinions and serious analysis of what’s going on the world of business and economics, you should consider the AFR site.
If you’re interested in deep analysis of international business, economics and politics, the Economist is worthy of your consideration. Like the AFR, it’s a commercial organisation, but the Economist’s reputation for serious and sensible global reporting and opinion makes it an important contributor to the world-wide media landscape.
Newsletters and share trading sites
There are many stocks/shares newsletters available by subscription and you can always sign up to a share trading site offered by the Australian banks and other providers. But please remember that these sites have a commercial imperative, so be sure to remain objective and sceptical should you choose to use them.
Super specials
If you are particularly interested in superannuation (and we think you should be, given that it’s likely to be an important part of your secure financial future), the following sites may be useful:
Commonwealth Superannuation Corporation (CSC)
CSC is the trustee of the military and public sector superannuation funds, including DFRDB, MSBS and ADF Super. This site (although understandably complex) is an important, detailed and unique source of educational information about the superannuation arrangements of most members and former members of the ADF.
This is a relatively new offering from the ATO. Its purpose is to allow you to make a comparison of the performance of the basic superannuation funds available in the marketplace. The calculator does not cover defined benefit funds (such as MSBS and DFRDB), but it does cover defined contribution funds of interest to members who joined the ADF from 1 July 2016.
This site is connected to the Australian Consumers Association and is dedicated to identifying and lobbying for areas of policy and practice improvement by the superannuation industry on behalf of consumers.
This site is operated by the Association of Superannuation Funds. While the association represents the interests of the superannuation industry, the site hosts material which should be of interest to anyone wanting to improve their knowledge of the industry’s size, structure, participants and regulatory regime.
Please don’t forget our site
Last, but not least, is the website of the ADF Financial Services Consumer Centre (the site you’re now on!). It brings together many of the themes and topics outlined above. If you aren’t interested in exploring all the sites in this article, a good starting point for your exploration and self-education would be to become familiar with our site which is curated and maintained with ADF members’ pay, conditions, opportunities and unique employment arrangements in mind.
Questions?
If ever you have any questions or problems about your personal finances, please don’t hesitate to contact us. We will be more than happy to help you by answering your questions direct, by referring you to the relevant educational material or source or by introducing you to an appropriate professional person.
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One final point…..if you haven’t already done so, we encourage subscribing to our free e-newsletter. That way you will receive trustworthy and impartial financial education in your inbox each month.
