New Kantar study reveals 45% of Australians want to be more financially confident but 76% don’t believe brands are actively working to educate them on financial matters

Sydney, 24 October 2022: In our disruptive world, Australians are struggling with their personal finances. With 45% wanting to be more financially confident (up 8% since 2021) and just 27% claiming a higher financial knowledge than others (down a whopping 33%), Kantar Australia’s second Finding Financial Freedom state-of-the-nation also reveals that three-quarters (76%) don’t believe that financial service brands are actively working to educate them on financial matters.

With financial security inextricably linked to mental health, 44% of people say they value a financial services brand that helps them take control of their finances (up 8%) – an imperative in our inflationary environment where 55% are negative about our economy and one-third think it will get worse. The insights overwhelmingly reveal a responsibility for brands to help every Australian build their long-term, sustainable mental wealth.

“We know that wealth determines health more than ever before and achieving financial autonomy has never been more complex. Finance goals and life goals are strongly interlinked, and as more Australians reassess their lives, this research clearly reveals the gap between knowledge and decisions. Australians are dreaming of financial independence but there’s a disparity with current realities,” says Anagha Kanhere, Kantar Australia’s Financial Services lead.

“Of our financial desires in the next five years, 16% want to own their first home and 13% to buy another property, while 15% want to invest in shares/bonds or save for an early retirement. Yet, Australians are still overwhelmingly relying on their savings accounts to build future wealth with 48% wanting to have enough savings for a rainy day.”

Kantar’s September Global Issues Barometer concurs, showing that more than half of Australians manage their money carefully to support their mood/mental health (52%). This is also supported by insights from Kantar’s 2022 Sustainability Sector Index, which reveals that social issues led by mental health, work and economic pressures are the most important sustainability issues for Australian businesses to address today.

As people continue to grapple with impacts of inflation and rising cost of living, the Global Issues Barometer also reveals that sentiments aren’t improving with 1 in 3 Australians concerned about their personal finances (35%) rising to 46% of under-35s. Over half believe their situation is worse than last year (54%), largely driven by the 47% struggling to meet their monthly household bills (69% of under-35s). Eight in 10 see the rising cost of goods and services (80%) led by petrol (71%), fresh produce (66%), food and drink (65%) and household bills (60%). In response, Australians are cutting back on general spending (30%) and deliberately looking for price reductions and promotions (26%). These short-term impacts are having very real long-term consequences – over half have had big life plans impacted (52%) with one-third of long-term saving goals affected (32%).

While financial independence means different things to different generations and gender identities, Finding Financial Freedom reveals that over 2 in 5 Australians wish to be financially independent in five years and think they need at least $1 million to retire ‘comfortably’. This rises to 2 in 3 Gen Z and Millennials who think they need at least $2 million or more. For females in particular, financial independence strikes a strong emotional chord with 40% saying it means ‘not being stuck in a job I don’t enjoy’ and 23% attributing it to ‘not being stuck in a relationship I find unfulfilling’.

Finding Financial Freedom also identifies an attitudinal shift away from emotional spending and towards cautious planning – something yet to translate into actual forward planning behaviours. Australians are in ‘money management’ mode rather than building for the future, with:

• 4 in 10 lacking the ability to tackle major expenses/cover living expenses without borrowing/selling assets
• 67% ‘emotionally’ spending less (up 11% since 2021)
• one-third focusing on debt reduction
• half focusing on finding ways to save money by reducing spend or changing providers
• 57% ‘cautiously’ planning less (up 11%)
• 3 in 10 investing in at least 1 type of investment excluding savings accounts (down 5%).

“The overwhelming lack of confidence in brands providing financial education is compounded by the 42% who feel brands don’t make information easy to understand either. This provides an enormous opportunity for brands to support and build trust with Australians,” says Kanhere.

“Kantar BrandZ research shows that banking and insurance are among the least trusted categories in Australia, and as such, people are more uncertain about borrowing and insurance products. But trust is a key driver of strong brands. Top brands around the world have grown a lot between 2019 and 2022 with the 4-year brand value growth of 147 brands ranked in Kantar BrandZ’s most valuable brands growing 75%. And the most trusted brands grew 57% more than the less trusted – underpinning the value of trust to grow your brand.”

“Australians are open to a conversation about financial independence, but don’t know where or how to start. And the language of financial sustainability is changing led by Gen Z,” says Carolyn Reid, Kantar Australia’s Head of Qualitative.

“Gen Z are early adopters, future shapers and trailblazers for building mental wealth – all while maintaining freedom of choice for work and living the lifestyle they want. 66% want to be more financially confident, 16% want to start their own business and 44% to reduce debt. Only 2 in 10 rely on their financial institution. Rather, they turn to their immediate circle for financial product information to fuel their growing ambition towards wealth-building (46%) and more proactive interest in finance. Last year, 56% invested in at least one investment type, 34% focused on debt reduction and 48% found ways to save by reducing spend or changing providers.”

“Gen Z want to go beyond feeling stable and secure financially. They’re also seeking stress management tools to positively contribute to their mental wellbeing and relationship with finance. This opens a consumer licence to operate and meaningful role for brands to be a mentor, educator or go-to source for information. There’s also a big role to support this desire for knowledge and learning to help drive decision-making.”

“Australians overall want to be more in control in understanding their finances and are being more proactive. They will value brands that empower them to do so,” adds Reid.

“We know Australians are looking for leadership in financial services and for emotionally positive and uplifting messages. They want brands to leave them feeling confident and inspired to unlock their mental wealth and financial sustainability. The opportunity to build mental wealth is to help close the value-action gap. It’s the conversation we must all have. And it can’t wait.”

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