Tool Box

Sydney Morning Herald

Wednesday March 15, 2006

MICHELLE INNIS

A BIG INSTITUTION OFFERS AN EASY WAY TO MAKE YOURSELF FINANCIALLY LITERATE AND MANAGE YOUR FINANCES MORE EFFECTIVELY - AND IT'S ALL FREE. MICHELLE INNIS REVIEWS AMP'S CD-ROM THINKING AHEAD.

What it is Banking and investment house behemoth AMP has updated one of its financial planning tools, a CD-ROM called Thinking Ahead. It was released last year, but has been updated. About 30,000 people have asked for a copy.

How it works The CD-ROM has more than 300 pages of information, links to 40 external websites and hundreds of tips for investors at every stage of life. It also has a glossary for those who may be familiar with some financial terms but need a little help on others.

Some of the topics covered include "How do I find a good mortgage?", "What should I do if I get an unexpected financial windfall?", "Why do I need a will?", "What should I do with a redundancy payout?" and "How much super do I need?"

The CD-ROM has links to SuperSeeker, the Australian Tax Office website that helps you track down your lost super, links to a risk-tolerance calculator and a link to AMP's own useful budget planner spreadsheet, which can help you work out how much tax you pay, how much you spend and how much you should be able to save each year.

The beauty of the CD-ROM is that it is easy to use. You may end up roaming through investor categories that don't necessarily apply to you. You can start researching investment basics and end up reading through the glossary of terms. You can decide you must know about splitting your super with your spouse but end up reading about tax breaks for older workers.

The surprise is that AMP has resisted the temptation to push products at those using the CD-ROM. Greg Kirk, AMP Financial Planning's managing director, says AMP will not use requests for the CD-ROM as marketing leads for financial planning business.

"We felt we wanted to be a market leader," he says. "We wanted to provide education for our clients and make it easy for them.

"Consumers want to be advised, not sold to," he says, adding the CD-ROM won't stop investors wanting to see advisers. It will just mean they have a better idea of what they want from an adviser.

What it costs The CD-ROM is free. AMP will post it to anyone who requests it. You don't have to be an AMP customer. You can ask for a copy through the AMP website at www.amp.com.au or call 133 608.

Where it fits Even AMP's competitors say Thinking Ahead could be a good idea. Few have the material in the marketplace to rival what AMP has pulled together. Another big fund manager with a large retail client base, Colonial First State, has written material available for investors, as do many others.

Investec Private Advisers' financial consultant, Viv James (who is also the author of a book on personal finance), says: "An educated investor is going to get much more from a financial adviser."

AMP's Kirk says: "Feedback from people who received the CD-ROM in 2005 was that they wanted even more technical information, which we have provided."

AMP has also provided links to Government sites that have the latest information, including legislative changes to super and tax laws.

"If we play a leading role, then we hope people come back to us," Kirk says.

© 2006 Sydney Morning Herald

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