Money and Life
(Financial Planning Association of Australia)

Thinking of a new job in the new year? With wage growth staying low, better benefits and work-life balance could be something to look for in your next role. Find out about the latest workplace trends for supporting employees with their health, finances and work-life balance.

The salary ceiling

While the wage growth rate in Australia for 2018 may be up on last year, it's still very low with second quarter figures putting the wage price index at 2.1%. What this means is we're seeing salaries rising only a fraction faster than inflation, with just 0.3% growth in real wages. If you're in the market for a new job, this doesn't bode well for pay negotiations with potential employers.

That doesn't necessarily mean a new job has no new rewards to offer. Perhaps you're looking for the challenges and opportunities to learn that a different role could bring. And at a time when companies are under more pressure to innovate and grow, it's becoming more common for employees to look at new ways to attract top talent and keep their workforce engaged.

Flexibility is key

When it comes to choosing a place to work, flexibility is something many people value. Whether it's the option to choose their hours, work remotely or more variety in the type of work they do, employees are often on the look out for an arrangement that suits their lifestyle better than working nine to five in the same office every day. According to the Mercer 2018 Global Talent Trends report, 51% of employees would like their company to offer more flexible work options and 71% of people who are thriving at work say their employer provides flexibility at work[1].

It's good news for Aussies that the flexible working trend seems to be catching on. In their latest report summarising five years of data collection, the Workplace Gender Equality Agency found more employers are making a commitment to flexible working arrangements.

Almost a quarter of employers (70.7%) now have a policy or strategy for flexible working, compared with just over half (57.5%) in 2013-14.

By the time a job offer is on the table, the topic of flexible working arrangement may something you've already discussed. But if it hasn't and it's something you're looking for, be sure to bring it up, particularly with your future boss. The Mercer report also found that while flexible working may be more common these days, it often happens in an ad hoc way and at the discretion of a manager[2].

Support for wellbeing

Flexible working is one of many ways employers can support health and wellbeing in the workplace. By allowing people more freedom to balance work and their other commitments, it's thought that flexible working can reduce stress, boost productivity and improve health outcomes for employees[3]. And it's definitely in the best interests of any business to invest in the wellbeing of their workforce. The 2017 Willis Towers Watson Global Benefits Attitudes survey reports that employees in poor health take more than twice as much time off work, and their rate of presenteeism is 25% higher too[4].

It's not just physical health problems that lead to this significant drop in productivity. The same report reveals almost a third of employees have suffered from severe stress, anxiety or depression in the last two years. So it's not surprising to learn that half of companies surveyed have introduced workplace programs to reduce stress or are planning to do so[5].

Financial stress is on the rise

Research from the report also shows financial stress is becoming one of the biggest factors in employee health and productivity. With almost a quarter (23%) of Australian workers being unable to raise $2,000 at short notice[6], financial insecurity seems to be a significant threat to health and wellbeing. Employees with money problems are twice as likely to be in poor health and also report higher levels of stress, absence and presenteeism.

So what can employers be doing to support their workforce towards a more stable financial position, less stress and better health? When surveyed by Willis Towers Watson on preferred financial support services from their employer[7], spending tools were the number one choice for workers. These would provide ways for workers to track spending, review their finances and set goals, giving them some practical solutions for addressing the immediate causes of financial insecurity and stress.

The second most popular choice of service is access to a financial adviser. While budgeting for their current situation and lifestyle may be more important, advice from a professional to secure their financial future is a big priority for employees worldwide.

Looking to reduce your financial stress levels? Get tips from CERTIFIED FINANCIAL PLANNER® professionals on how to plan ahead with your finances so you can worry less, here and now. 

[1] Mercer 2018 Global Talent Trends Study, page 16

[2] Mercer 2018 Global Talent Trends Study, page 20 "Most companies have pockets of flexibility based on individual arrangements with a manager, but only 3% consider themselves industry leaders when it comes to flexibility"

[3] Workplace Gender Equality Agency, Workplace Flexibility Strategy, page 4, "Flexibility is not only a beneft to businesses, it also benefts employees who can experience reduced stress, improved job satisfaction and better health outcomes through access to flexible working arrangements."https://www.wgea.gov.au/sites/default/files/Building_a_flexibility_strategy.pdf

[4] 2017 Willis Towers Watson Global Benefits Attitudes survey, page 11, "Employees who are in the poorest health report more than double the number of absences and more than 25% higher presenteeism than other colleagues."

[5] 2017 Willis Towers Watson Global Benefits Attitudes survey, page 6, "Mental health issues are widespread around the world, with around three in 10 employees reporting they have suffered from severe stress, anxiety or depression in the last two years. Around half of employers have either introduced initiatives to reduce stress or are planning to do so."

[6] 2017 Willis Towers Watson Global Benefits Attitudes survey, page 8, "Comparable percentages of workers in Australia (23%), Canada (29%) and the U.S. (37%) could not quickly raise $2,000 (local currency)"

[7] 2017 Willis Towers Watson Global Benefits Attitudes survey, page 26, "If your employer were to offer the following to help you manage your finances, which would you mostly prefer?"

Money and Life
(Financial Planning Association of Australia)

Does investing in a financial planner really pay off? According to the latest research from Sunsuper you could be thousands of dollars better off when you make choices based on professional financial advice. Plus you'll take more family holidays, have greater peace of mind and more confidence in your financial decisions.

Teaming up with research experts, Core Data, Sunsuper have released The Value of Advice Report. Insights include financial forecasts for three couples at different life stages and the lift in living standards and retirement expectations they're enjoying as a result of seeking advice. In all three cases it's very clear that financial advice has a real and immediate impact on their lifestyle, and creates opportunities to achieve important personal goals.

1. Building a bright future for a young family

Adam and Mara's goals for their family of four aren't out of the ordinary. Paying for private education and taking regular holidays are things that many families might prioritise but struggle to achieve when they're paying off a home loan and juggling work and family commitments.

Thanks to advice from a financial planner, Adam and Mara have settled personal debt, made appropriate investments to provide extra income for holidays and school fees, and arranged suitable insurances to make sure they're secure in the event of injury or illness.

Expected financial benefits from implementing their plan include:

• Cover private school fees starting from primary school (instead of high school only)
• 32 family holidays before retirement
• An additional $54,720 in assets held at retirement

2. More time to travel in their prime

Heading down the home straight towards retirement, Amanda and John love to travel. They're currently focused on their careers, but keen to be living a good life, now and in the future. Having enough to provide for their children in their will is also an important goal.

Following financial advice has allowed Amanda and John to manage their debt more effectively and ensure they're covered by insurance in case of illness or injury. Their new strategy would also see them put more income into a holiday fund and their super savings.

Expected financial benefits from implementing their plan include:

• Savings of $5k pa into a holiday fund for an extra 17 trips in their lifetime
• Increased life and TPD insurance cover to match debt and income needs
• An additional $78,720 in assets held at life expectancy that will benefit their children

3. Staying comfortable and independent in retirement

Having recently reached retirement, Jocelyn and Lou want to ensure they can continue to meet living and medical expenses and enjoy their senior years without financial stress. Not becoming a burden to their children is important to them and they'd like to retain assets to pass on to the next generation instead of having to sell them to generate more income.

With a new financial plan to guide them, Jocelyn and Lou can eliminate debts and reduce the burden of interest and loan repayments on their cash flow. They've also found ways to reduce their annual budget and still save money towards holidays.

Expected financial benefits from implementing their plan include:

• Savings of $5k pa into a holiday fund for an extra 11 trips post-retirement
• $47,250 of savings in interest on current debts
• An additional $7,237 in assets held at life expectancy that will benefit their children

Face your fears and feel better about finances

As well as looking at modelling for these three couples, Core Data also surveyed 1000 Australians as part of the research project. Of those who received advice, 80% said they felt more confident making financial decisions as a result and the same proportion believe advice has brought them more peace of mind. And 75% take a view that financial advice is worth more than it costs.

In spite of these clear benefits to wealth and wellbeing, nearly nine million Australians have unmet financial advice needs, according to Anne Fuchs, Head of Advice and Retail Distribution for Sunsuper. So what's holding them back from seeing a financial planner? "Many people end up too scared to reach out to a financial adviser for fear they don't know enough, don't have enough or will be told their dreams just aren't achievable," says Anne. "This can leave many people to suffer in silence, not knowing what to do or who to turn to for help."

Reaping the benefits of advice at every life stage

For others it can be a case of leaving it until retirement, because they're too busy and managing their money well enough while they're earning a regular income. But the benefits of financial planning can be enjoyed now, and later, according to CoreData Principal Economic Researcher, Andrew Inwood. "Good advice does of course make you wealthier at retirement, but it also adds value all the way through your life in the choices you can afford to make about schooling, insurance, holidays, housing and personal interests," says Andrew.

"The important thing to measure is how it adds value to every life stage and enables individuals' life aspirations that's what we have modelled."

Not sure whether you've reached that life stage where you need support and advice from a financial planner? Discover 5 good reasons you might have for seeking financial advice. And if you are ready to make that first appointment, find out how to make sure a planner is the right one for you.

Marnie Banger
(Australian Associated Press)

Australia's biggest companies will soon be forced to publish details of how quickly they are paying small businesses what they owe them.

The step is part of a federal government plan to help small businesses get paid faster, Prime Minister Scott Morrison has revealed at a business event in Sydney.

The strategy comes as too many small businesses still face long payment times, Mr Morrison said.

"Cash flow is crucial to the health of any business, but especially small business," he said in a statement on Wednesday.

"We are taking action to ensure small business is not being used as a bank."

Under the plan, the commonwealth will be required from mid-2019 to pay invoices of less than $1 million within 20 days, instead of 30 days.

The federal government is also committing to ensuring 35 per cent of its contracts go to small businesses, rather than its current 10 per cent.

The coalition will also help develop an annual reporting framework, which would require big companies with turnovers of more than $100 million to disclose how they go about paying small businesses.

More than 3000 of Australia's largest businesses would be covered by the framework, including foreign companies and government agencies.

The government would also change its procurement policies so big businesses seeking government contracts would need to match its 20-day payment time frame.

The commitment comes after the NSW government announced earlier this year it would pay small business contractors within 20 days by the end of 2018.

Mr Morrison said all states should follow its lead and that he's added the issue to the agenda for a meeting with state and territory leaders in Adelaide on December 12.

"All levels of government should set the standard and there should be no excuses for not paying small businesses on time," he said.

Scamwatch is calling on businesses to urgently review how they verify and pay accounts and invoices as reports of business email compromise (BEC) scams to Scamwatch have grown by a third this year.

"This is a very sophisticated scam, which is why many businesses only realise they've been caught out once it's too late," ACCC Deputy Chair Delia Rickard said.

BEC scams occur when a hacker gains access to a business's email accounts, or 'spoof' a business's email so their emails appear to come from the company. The hacker then sends emails to customers claiming that the business's banking details have changed and that future invoices should be paid to a new account. These emails look legitimate as they come from one of a business's official email accounts. Payments then start to flow into the hacker's account.

In other variations of the scam, the hacker will send an email internally to a business's accounts team, pretending to be the CEO, asking for funds to be urgently transferred to an off-shore account. Hackers can also request salary or rental payments be directed to a new account.

Scamwatch has even received reports of the hackers intercepting house deposits that have been sent to conveyancers, real estate agents or law firms.

"It's a scam that targets all kinds of businesses, including charities and local sporting clubs. There is a misconception these scams target just small business, however the largest amount of reports and losses came from medium sized businesses, including one that lost more than $300,000," Ms Rickard added.

Businesses have reported losses to these scams totalling $2.8 million to Scamwatch in 2018. However, this represents only a fraction of total losses to this variety of scam across Australia. BEC scams cause businesses significant financial harm, accounting for 63 per cent of all business losses reported to Scamwatch. The average loss is nearly $30,000.

"Effective management procedures can go a long way towards preventing scams, so all businesses should firstly be aware these scams exist and that their staff know about them too," Ms Rickard said.

"They should consider a multi-person approval process for transactions over a certain dollar threshold and keep their IT security up-to-date with anti-virus and anti-spyware software and a good firewall."

"Businesses should also check directly with their supplier if they notice a change in account details. It's vital businesses don't do this just by return email or using other contact details provided. Find older communications to ensure you have the right contact details or otherwise independently source them, so they can be sure they're not contacting the scammer," Ms Rickard said.

Businesses affected by BEC scams should contact their financial institution immediately and consider professional IT advice to ensure their email systems and data are secure from hackers.

Money and Life
(Financial Planning Association of Australia)

Does it sometimes seem like money is standing in the way of your happiness? How we feel about money can really have an impact in the role it plays in our lives, how we spend it and how secure we feel about our future. Find out how our emotions positive or negative can influence money habits and what you can do about it.

Our feelings about money can be as strong as they are volatile. One day you're elated because you got the mortgage to buy your first property. A month later you're stressed out from unexpected maintenance bills on your perfect new home. Or perhaps you experience this cycle of excitement and anxiety from everyday retail spending on clothes, gadgets, or a night out with friends.

It's only natural for people to seek satisfaction from spending money. After all, money is an essential tool for meeting our needs for shelter, food, transport and many other things that make our lives comfortable and complete. But we all place different value on these various needs and our feelings about money can be just as wide-ranging. So we each have a money story that's fairly unique.

What's your money story?

Researchers Bradley and Ted Klontz coined the term 'money scripts' to describe the feelings and beliefs we have around money and how these affect our financial behaviours. According to their research, these scripts tend to be inherited from the family and culture you come from. "Money scripts are typically unconscious, developed in childhood, passed down from generation to generation within families and cultures, contextually bound, and often only partial truths.[1]"

Patterns you might recognise

While yours might seem absolutely true to you, money scripts for different people can be quite opposite, but still lead to the same behaviours. According to Brad and Ted Klontz, there are four main categories our money beliefs fall into.

1. Money avoidance - feelings of shame about having money and that you don't deserve it are the hallmarks of the money avoider. You may assume people with wealth have either inherited it or used deceit to get it.
2. Money worship - you basically believe money can solve all your problems. If only you could have more of it, you'll stop worrying and enjoy life more, instead of feeling stressed and working too hard.
3. Money status - spending money shows the world who you are. Your sense of personal worth and value is demonstrated by your wealth and the things that go with it. Spending more than you earn is an easy trap for you to fall into.
4. Money vigilance - money is your security blanket. Having it makes you feel safe and protected and spending it feels like putting yourself in the path of danger, even when you still have plenty to live on.

Your own personal money relationship may be a combination of two or more of these identified scripts. According to the research, the first three can all lead to negative behaviours such as compulsive spending or gambling, overwork and financial dependence or denial. While having a 'vigilance script' can certainly keep you from being reckless with money, it isn't necessarily any better for your wellbeing to avoid spending money because it scares you.

Acknowledge how you feel

Findings from the Klontz research suggest it may not be necessary to actually change your money script. It's more a case of acknowledging what your feelings are and looking for practical ways to disrupt the behavior they cause. Being a money worshipper, for example, often comes with feelings of envy when faced with the trappings of a life that seems better than yours. If this sounds familiar, remember to take regular breaks from social media feeds, like Instagram and Facebook that remind you of the upgrade to your home, wardrobe or holiday your money script has you longing for.

Switch to a new feeling

Another way to disrupt money feelings that make you feel bad when you spend it or don't spend it is to substitute a positive feeling for a negative one. Perhaps trading envy for gratitude is a way to break the cycle of dissatisfaction. You could do this by practicing gratitude as you pay for your food shopping, mortgage and electricity bills to remind yourself that a secure, comfortable life is already yours.

Team up

When you're trying to work against something as powerful as your money beliefs, the last thing you need is to be surrounded by people who aren't supportive of the change you're trying to make. As some of your money feelings are likely to come from family, they may not be the best ones to look to as a sounding board for your new money goals.

Finding yourself a money buddy can be a great way to get support to change financial behaviours that hold you back. Whether their script is similar to yours or completely different, you can get to know each other's weaknesses when it comes to money. Then you rely on each other to call out old negative money feelings and encourage you to act on positive new ones instead. 

Looking for ways to overcome negative financial behaviours, one step at a time. Discover 7 little ways to be better with money and find out how other Aussies feel about their money.

[1] Journal of Financial Planning, How Clients' Money Scripts Predict Their Financial Behaviors, Bradley T. Klontz, Psy.D., CFP® and Sonya L. Britt, Ph.D., CFP®