Melbourne, 23 January 2023. With many Australians facing cost-of-living challenges this New Year, a report from AIA Financial Wellbeing highlights the urgent need for more conversations about financial wellbeing in our community.
Financial Wellbeing: The Missing Piece of the Wellbeing Puzzle explores the impact financial wellbeing has on our physical and mental health, and considers the roles financial knowledge and behaviours play in financial satisfaction — and ultimately, our ability to lead healthy and fulfilling lives.
Pina Sciarrone, CEO and Managing Director of AIA Financial Wellbeing, says it is important to create a community dialogue around positive financial behaviours, due to the link between our experiences with money and our physical and mental health.
“At AIA Financial Wellbeing, we see the stress and uncertainty that can arise when people are experiencing financial difficulty. We are in a time when most Australians are grappling with cost-of-living pressures and the impact of rising interest rates.
“This ever-changing climate creates financial pressure which can lead to a deterioration in physical and/or mental health. Our aim at AIA Financial Wellbeing is to ensure that our customers achieve peace of mind and an improved sense of holistic wellbeing which incorporates financial, physical and mental influences. This comes with having a plan in place, a pathway to achieve a goal — be that a savings plan, clearing debt, building wealth, a safety net for themselves and their loved ones — and a plan to improve their physical and mental wellbeing.”
Defining ‘financial wellbeing’ as ‘the perception of being able to sustain current and anticipated desired living standard and financial freedom’, AIA Financial Wellbeing’s new report investigates how we think about money, how we compare money, and how we use money. It also highlights research into Subjective Financial Wellbeing – how we feel about our financial situation – noting that people with the same objective financial situations can hold different views of their personal financial wellbeing.1
Australian household data shows that both current and previous experience of financial hardship leads to a greater risk of mental health problems.2 A separate study has found that financial hardship, through an inability to meet mortgage or rent payments and job security concerns, is one of the largest drivers of psychological distress.3
CEO of AIA Australia Damien Mu says the report highlights the crucial role financial advisers and the advice industry play in helping Australians safeguard their futures. “Australians are currently facing increased financial uncertainty, which is placing additional pressure on their day-to-day lives. Financial advisers can empower Australians to make informed decisions about their finances. We hope that this report encourages more people to consult with a financial adviser, so they can access the information and guidance they need to protect what matters the most.”
Adds Ms Sciarrone, “At AIA Financial Wellbeing we believe that we have a collective responsibility and opportunity to continue to support financial, physical and mental wellbeing. The findings of this report indicate there is an important role financial advisers can play in understanding and incorporating subjective and objective financial wellbeing. Advisers can also drive important conversations about physical and mental health and implement a holistic advice plan. This has the potential to really shift the dial on how we think about and behave with regards to our finances.”
“We believe there is a need for increased education and access to advice so that Australians can learn the important role that positive financial behaviours play in helping us to lead healthier, longer, better lives.”