The answer is you. When it comes to personal finances you will benefit tremendously from doing two simple, powerful but not always easy things. Pay close attention to the services you are getting and what you are paying for them; and educate yourself about money.
We hear a lot about how the financial services industry is doing the wrong thing, which may make you feel powerless and simply want to give up, in the mistaken, but understandable, belief that no one can be trusted. But what we have learned in recent years about poor behaviour by the financial services industry actually makes it that much more important to stay engaged and keep learning.
A decade of scandals
There has been lots of bad news about the lack of trustworthiness of the industry in recent years. A seemingly endless stream of media stories, inquiries and reports revealing unethical behaviour and even unlawfulness. The real low point was in 2008, when bad banking practices globally appear to have caused a financial crisis so serious and damaging that is has been dubbed the Great Recession, second only to the Great Depression of the 1930s.
Most recently in Australia, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Banking Royal Commission), which issued its final report on 1 February 2019, provided evidence of malpractice so widespread and systemic that it even surprised some of the most seasoned scandal-weary observers.
It is not the Centre’s role to stand in judgment or to recommend particular policy, legislative or cultural changes. Our role is to help Defence members and families understand financial matters and offer practical steps you can take to protect yourself and achieve financial security. We regard the following suggestions as two of the most impactful things you can do. Even better, they are free.
One of the biggest lessons out of the Banking Royal Commission is that even in a heavily regulated market with strict rules of conduct, there are no guarantees that people will do the right thing and that you will be protected. You need to pay attention. Remember the saying ‘caveat emptor’ or ‘let the buyer beware’.
A good example of failing to pay attention is the revelation that thousands of financial advice clients were charged what the Banking Royal Commission called ‘fees for no service’, sometimes for years. They were paying ongoing fees for little or no service, presumably without realising it. This is wrong. But it apparently happened on an industrial scale. The best way for you to protect yourself is to be sceptical and pay close attention to what you are being charged and why. If you are not sure what a fee or charge is for, ask.
Simply paying attention is more than half the battle. The next thing to think about is where you can find reliable sources for information you can use to learn more and for help where you need it.
Fortunately, besides the independent information made available for members and families through the ADF Financial Services Consumer Centre, there are other reliable sources of information and assistance out there. These include:
for help with severe financial problems go to the Financial Counselling Australia website (FCA) or call them on 1800 007 007 – FCA are the not for profit peak body for free financial counselling services for the community
for comprehensive independent information on personal finances go to MoneySmart the website supporting Australia’s National Financial Capability Strategy
The good news is that there has probably never been so much information and assistance available to help you and your family along your money journey. With some attention and ongoing learning you will be able to set yourself up for a secure financial future.
Check out our other articles on a range of helpful topics