The chief executive of leading aggregator Vow Financial says debt management should be a major focus for brokers this new year.
Speaking to Australian Broker
, Vow CEO Tim Brown said debt management will be particularly important for consumers this year in a slowing property and financial market.
“I think [debt management] will be important for a number of reasons this year. The property market is starting to slow, the equities market is in a nightmare, and I think for our clients it is about building cash. I think cash will become king as the market starts to slow and I think people who are in better position with a strong capital flow and strong equities positions – in other words, paying some debt down – will be in a stronger position to select an opportunity moving forward,” Brown said.
“They can’t do that if their debt to asset ratio is increasing rather than reducing. By better financial and money management they will be able to reduce their overall debt to asset ratio which then creates, when the timing is right, new opportunities.”
Debt management will also be a major focus for the aggregator this year after it launched Vow Money Manager as a pilot at its annual conference in South Africa in October.
“The launch of our new cash manager will help brokers help clients better manage their budgets to achieve their goals and objectives,” Brown told Australian Broker
“[Vow Money Manager] is fairly revolutionary... It is not financial planning, it is debt management, but it also includes property. We launched that to the broader network in November and December and we are now taking a number of our brokers through a training program that will help them operate the system and better advise their clients on how to budget and achieve their long term financial goals and objectives.”
According to Brown, the software will sweep a client’s bank accounts and bring current information into the client’s budgeting process, allowing them to understand where they are spending money.
“It also highlights where potential discretionary spends are occurring and how they can better manage that to make sure it doesn’t affect their long term financial goals,” Brown said.
Not only will the new software help brokers expand their service offering and retain existing clients, Brown says, but it will also put a broker front and centre of a consumer’s financial journey.
“A broker needs to become like a builder and control the relationship [with the client]. Brokers should be the ones to bring specialists in at different times, such as taxation, financial planning, conveyancing or property advice.
“The broker should be the determinate of that. When that client needs that service they should control the relationship and help the client better manage their affairs.”