As hundreds of thousands of Australians grapple with entering unemployment, many are turning to their accountants and financial advisors to figure out how to stay afloat, understand what benefits they can access, and how they can protect their assets.
With record household debt, reduced incomes from wages and investments and the ability to access superannuation early amid competing claims about its impact on your retirement, it’s no surprise household financial stress is at an all-time high and people need help and advice more than ever before.
As the economic fallout from Covid-19 unfolded, a trip to the accountant or a financial adviser’s office became close to impossible for many and embracing online – something the industry has been talking about for the better part of a decade – became a reality overnight.
In that moment, myprosperity founder Peter McCarthy saw the wealth management platform’s average daily users more than double as advisers and accountants went into lockdown.
“Without face-to-face meetings, advisors have had to think very quickly about how they could better leverage technology to build and maintain their client relationships,” he said.
The use of online forms – or digital fact finds, tax checklists and onboarding forms – which help advisers digitise the engagement process by eradicating paper to streamline data collection, is up over 300% since December 2019. Digital signing of documents is up 225%, a direct result of less face-to-face meetings and people working from home.
“We’ve seen a spike in interest from advisers looking for a platform to help older people get their affairs in order and younger people worried about their financial future, especially with uncertainty around job security,” McCarthy said.
The platform has experienced a 110% uptick in the number of assets added in the year-to-date and the number of household liabilities increased 200% over the same period.
McCarthy said this highlights that households are concerned about debt levels.
“We suspect the increased platform usage is two-fold. For advisers and accountants, the spread of the virus means there’s a forced shift from face-to-face meetings to online ones and they’re having to collaborate digitally, helping small businesses and households brace for tougher times,” he said.
“For households, we’ve seen a significant spike in requests around assistance in financial management, retirement and estate planning, highlighting the increase in concern around financial health. These troubling times suggest people are looking for advice to help stem the loss and shore up their financial future.”
McCarthy believes the economic effects of Covid-19 will completely transform the way we do business, interact and transform what we value.
“Events like these mark generations. We’ve seen it with the GFC, with World Wars, with the Industrial Revolution. When we rise from COVID-19 the world will be a very different place and technology is the element that is empowering all of us to connect, to manage our affairs, to make a living,” McCarthy said.
“A Black Swan event like this has the potential to change behaviour faster and we are already seeing this trend.”