Financial wellness: Personal finance and cash management

by Apoorva Pokharna | Nov 6th 2022
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At the inaugural Investor-Tech Showcase, we got together with some of our leading technology partners to discuss current market conditions and how technology solutions, now more than ever, can assist investors in making more informed and strategic portfolio decision making.

In this third video of our series "Investment Technology Journey for Self-directed Investors", we look at how financial wellness and cash management impacts future financial outcomes. We ask our panel of financial experts what trends they’re seeing among their users, what investors should be thinking about or prioritising when planning for retirement, plus any financial wellness tips for the current market.

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We started out by asking Jason Leong, Co-founder and CEO at PocketSmith what trends he is seeing among users in the current market.

According to Jason, it's important for investors to reexamine the "why" behind the investments they make and their cash management journey, to make sure it's a good match for their individual lifestyle. Investors should not stick to a rigid strategy, and this is a crucial part of the homework that helps gain alignment with goals. That way when considering alternatives, the right questions are being asked relating to their investment strategy.

"Explore your multiverse and flesh out the detail. Then use technology to turn those future stories into your actionable financial details" – Jason Leong, Co-founder and CEO at PocketSmith

Following on from Jason’s suggestion, we asked Nathan Isterling, CTO at Otivo, what investors should be thinking about or prioritising when planning for or nearing retirement.

Nathan believes that for retirement planning, everyone should have a basic understanding of their needs.That includes two things: understanding how much income you are likely to need and when you want to retire.Those two factors alone will determine how active an investor should be during their time of employment or earning.

According to Nathan, the most important thing an investor can do while employed is to make sure they are in the right investment options and are investing the right amount according to their income and expenses.

Finally we asked our panel of experts: What is the number one thing that investors should be doing in terms of their financial wellness in this market?

Jason believes the number one thing investors should do is to share their investment journey. According to Jason, PocketSmith has been talking to people from all walks of life and at different stages of their investment journey, and one topic that comes up again and again is the challenges regarding financial transparency with their loved ones.

For the other stakeholders in the household, information overload can be overwhelming, yet too little information is also stressful. Sharing the journey is difficult but it is of the utmost importance as it reduces that strain on relationships and it makes it easier for investors to plan together.

For Nathan it was difficult to pinpoint his number one tip, but he advised investors to make sure that they are in the right investment category and that they are planning and contributing as much as possible into their superannuation and doing some financial forecasting.

"Contributing to your superannuation early on might seem a long time away, but once you are retired, it'll be worth it." – Nathan Isterling, CTO at Otivo

Finally, cash flow automation can be a useful tool to help investors keep a positive cash flow and ensure they have sufficient cash in hand to reinvest in other lucrative opportunities. Modern financial technologies can assist investors to gain better visibility of their assets to make more sensible life choices and enable them to achieve their savings and investment goals.

For example, Sharesight has a useful integration with technology partner Xero, which automates the flow of share purchases, sales and dividends from your portfolio into Xero so you can easily reconcile against bank statements. You can also sync your cash balance into Sharesight to gain greater insight and better assist in your personal wealth management and budgeting. It also saves a huge amount of time and money when reconciling at tax time.

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