Empower clients with financial knowledge

by Sarah Eifermann06 Sep 2021

Recognising an education gap in the financial literacy of everyday Australians, award-winning finance broker, business strategist and leadership coach Sarah Eifermann created the Money Intelligence course to meet the needs of brokers and consumers.

COVID-19 lockdowns, dwindling cash flow and 8.5 million financially illiterate Australians. Is there a silver bullet?

One in three adult Australians are financially illiterate, according to the Melbourne Institute’s 2016 Household, Income and Labour Dynamics in Australia survey. Right now, brokers have a unique opportunity to be part of a financial literacy revolution.

Wise spending habits are not a thought process but a learned behaviour, and too often Australians have not had financial role models or learned the basic fundamentals of finance. This is concerning, considering that financial literacy is the primary determinant of a range of improved life outcomes, including wealth accumulation, retirement planning and women’s economic empowerment. The fact that one in two women are defined as financially illiterate in Australia doesn’t bode well for the future of half the nation.

Right now, brokers can be part of the financial literacy revolution, facilitating education of their clients through the Money Intelligence online learning module designed to empower the consumer and reduce the number of hours brokers spend getting clients fiscally prepared.

Most consumers first make contact with mortgage brokers when they are making major financial decisions, like the purchase of a home. With a 60% market share, brokers are clearly trusted advisers who provide invaluable advice on budgets and savings, which are pre-requisites for lending, especially for a first home owner or where a pre-approval is required.

What if this education could be delivered at a deeper level, without brokers investing extra time or funds?

 The volume of time invested by brokers in educating their clients before any lending application is submitted often goes unrecognised. The hours spent walking clients through the complex home loan process is simply a given. In addition, the changes to the interpretation of living expenses analysis (varying between licensee and lender), and the requirement under the NCCP Act to meticulously quantify a client’s expenditure, has brokers investing even more hours in assisting clients whose loan applications may not even proceed to settlement.

 It’s not often that a client attends a broker appointment with their living expenses fully documented and easily vetted, meaning brokers invest vast amounts of time for uncertain outcomes.

A novel, online financial literacy course, Money Intelligence provides brokers and consumers with a resource that educates and empowers clients, while reducing the number of hours invested in this by brokers.

Benefits to consumers

  • Achieving basic financial literacy, including an understanding of cash flow and budgets and better knowledge on which to base decisions
  • Gaining a complete and documented understanding of living expenses
  • Being well prepared and positioned to apply for lending
  • Having the chance to fix bad spending habits as they work out what’s most important to them, such as buying a house

Benefits to brokers

  • Clients are more educated and thus able to make faster decisions
  • Time required by the broker to explain basic concepts is reduced
  • Clients are more prepared and potentially become more qualified as borrowers
  • Offering clients the course is a great way to build relationships and show value
  • Clients have buy-in because they have paid for the course
  • Brokers are able to diversify their business and earn additional income

This innovative financial literacy course is a win-win for both brokers and clients. Brokers can now be part of the financial literacy revolution by simply embedding this course into their customer onboarding process with no financial outlay.

Broker Scott Beattie of Queensland brokerage Cube Home Loans had this to say about the course: “What we saw with Sarah’s program and the opportunity to co-brand was not only a way for us to further diversify our business but a way for clients who aren’t ready to purchase to engage in a program that will enable them to start a pathway that will almost guarantee the client returns to us when their circumstances change and they are ready to purchase.”

Paul Kusli, co-founder of Melbourne brokerage Kudos Money, has also seen the benefits of the course. He explained: “For compliance, we spend an enormous amount of time analysing bank statements and explaining to clients actual versus estimated spending, which massively slows down the process of an application. Some lenders require bank statements matched to disclosed living expenses, or the application may get declined. By integrating Sarah’s course into our onboarding process, we’ve noticed clients have a greater understanding of the process and are more comfortable with questions on their spending habits as they now know the answers, feel it’s less intrusive and may have already changed to positive spending behaviour. They are now on board with the journey rather than fighting us in answering all our required questions.”

For more information about the Money Intelligence online learning module, email [email protected]

Sarah Eifermann
Finance and business strategy adviser, Helix Planning