What is Financial Wellbeing - a definition

Financial Wellbeing is a measure of the financial impact on the Advisable Australian's physical, mental and social health.  It is a measure of how well they cope with financial issues and circumstances.

Financial Wellbeing is highly driven by an individual’s certainty in their life and financial situation, and a positive sense of how they are doing in achieving their financial goals.  With this in mind, Financial Wellbeing is generally linear with age and the uncertainty attached to an individual's life-circumstances and health.  But other factors come into play such as, savings and debt. 

Financial Wellbeing generally improves:

How Financial Wellbeing impacts Australian lives

Higher Financial Wellbeing means less frequent worries about money. The majority of those with very high Financial Wellbeing either don’t have any financial issues at all (21.2% of them) or rarely/never worry about financial issues (51.0% of them). Only about one in 20 (5.3%) worry about money daily or weekly.

Lower Financial Wellbeing individuals typically have aspects of their life that are troubling them or giving them stress, for example two-thirds (68.5%) of individuals with low Financial Wellbeing worry about money daily or weekly. The low Financial Wellbeing group are also less likely to feel prepared for retirement (only 18.7% relative to 89.5% of very high).

As a result, those with low Financial Wellbeing are significantly more prone to suffering the negative impacts of finances often. More than four in five (83.3%) in the low Financial Wellbeing group have suffered from adverse mental health impacts several times.  Three in five (60.1%) suffer from adverse physical health impacts multiple times and their family life has suffered several times too (68.1% of them).

The impacts of financial issues can have a detrimental effect on aspects of a person's life — not just financial 

How advisers can benefit and support moving a client from low to very high Financial Wellbeing

Increasing client Financial Wellbeing improves their personal outcomes but in turn improves their overall satisfaction with the financial advice and service provided.  For those that receive advice and have very high Financial Wellbeing, they are more satisfied than the other groups (69.4% of them are very satisfied) and more likely to recommend their financial planner (85.5% are extremely likely to recommend).