Kate Farrar is the CEO of LGIAsuper the now-public offer Queensland super fund that manages $12 billion in savings for over 80,000 members, including many Indigenous Australians in the state.
She recently spoke as part of a panel on Secrets of the Money Masters, and discussed the particular challenges facing Indigenous communities from a financial services perspective and suggested ways both these communities and the industry more broadly can work together.
The law and families
Farrar noted that the structure of Indigenous families is often different to the way superannuation law is written. "From that perspective," she continued, "what's challenging in fact is how to ensure the benefits are dispersed to the right people when one of our Indigenous members pass away."
She continued: "Only around 12% of our Indigenous members have a binding nomination or beneficiary. When you think about the family structures, often they’re very broad and dispersed, so that can add a lot of complexity."
She recommended to any Indigenous super members to "make sure you have a binding nomination so you know where your super, which is often your largest asset, is going when you can no longer use it."
It's never too late to get advice
With respect to financial advice, Farrar said: "The earlier you start the better. It’s like that 10,000 hours to get to mastery idea. No age is too young to seek financial advice, nor too old."
She added, though, that from looking at the LGIAsuper member-base, "we’ve found our Indigenous members are a sixth as likely to take financial advice," so it's critical advisers get their message out to these communities.
This is especially important, Farrar continued, given the "stark" and "shocking" differences between Indigenous and non-Indigenous super accounts.
"When we look into our member-base," she said, "their average super balance is something like a quarter for Indigenous members, compared to non-Indigenous members. It’s a terrible statistic. Part of that is because there’s a greater prevalence of casual work, but also some Indigenous members have issues with multiple accounts, so it’s really important to make sure you focus on consolidating what you have."
Finally, Farrar commented on the importance of financial services reaching out to Indigenous communities. "Queensland is a large place," she said, "and we cover all of it. I think that last year, our education team went out to talk to Indigenous and non-Indigenous members, and we covered 334 workplaces. In some cases they had to take a charter flight to visit them.
"We make available these the messages, the education and support, the health checks and advice – it’s important people take them up and to look at what’s on offer."
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