Low quality advice and misconduct within the financial service industry in Australia led to its population losing an estimated A$201bn (£111bn, $135.7bn, €122.5bn) over the last five year, according to a study by the University of Melbourne.
The research, called FinFuture – The Future of Personal Finance in Australia, found that 54% of the population was negatively affected.
Additionally, high fees and costs associated with payments and management of superannuation accounts also played a role.
“About two thirds of Australians face some level of financial vulnerability and stress,” said Carsten Murawski, professor and co-author of the report.
“In Australia, financial concerns are the number one concern among young people and are the second biggest concern after climate change among older Australians.”
Lack of trust
“The misconduct scandals have led to a substantial erosion of trust in Australian financial institutions,” Murawski added.
“Only about one in five Australians believe that banks in general have their customers’ interests at heart or that they behave ethically. Only about one in four believe that banks in general will keep their promises.”
The most cited reason stopping Australian from improving their financial situation was “I do not trust financial institutions or advisers”, followed by “thinking about my finances is overwhelming”, the report found.
As a result, one of the suggestions made in the report said: “Financial service providers should be subject to a duty to consider financial well-being in performing their functions and providing their services; in particular, they should be required to consider what impact a course of action would have, or would be reasonably likely to have, on the financial well-being of an individual.”
