Why are Australians reluctant to switch financial products?

I know there are many Australians who don’t feel they get the best home loan or the right returns on investments. But here’s the odd thing, many are reluctant to do anything about it!

We are naturally resistant to change. Worried that it will take too much effort, time and cost, but it really does make sense to shop around. Just like with any other large purchase, comparison is needed before you commitment to a specific product.

Here are some of the reasons why people are reluctant to make the switch.

Loyalty

How often do you switch banks? Let me guess, not often. Australians are incredibly loyal. In fact, statistically you are more likely to get divorced than switch banks. Research shows that 40% of people are still signed up with the bank which they joined in childhood.

We’re often lured to the well-known brand lenders, especially with home loans and once we’re there we stay and can spend long periods on the same deal. Being loyal can give us a sense of security and familiarity. But by being loyal many people are missing out on good deals.

Too much hassle

Some think it is too much hassle to switch a home loan, and that they don’t have the time to look at new investments and to discuss it with an adviser. I call it money apathy.

Others grumble that they’re not getting the right home loan deal and are paying over the odds, but do very little about it. Nowadays it doesn’t take long to make any switches, especially if you seek help from a mortgage or financial adviser. New legislation means it’s become a swifter, easier process.

 Don’t like talking about money

It’s a fact of life that people don’t like sharing intimate information. Money and sex are at the top of the pile. They are considered the subjects which can become touch points and bring on charged emotions. There’s a lot of shame around money, people feel they have too much or too little and this prevents them from making changes and seeking assistance.

People think that advisers won’t be interested in talking to clients about the best deals if they have credit card debt and overdrafts. However, these are the type of people that would most benefit from some sound guidance.

Don’t make money the ‘elephant in the room’. If you need advice about switching home loans or want to look at ways to make your money work better for you, give me a call at TV Financial.