Australians are ramping up engagement with their super but they’ve still got a long way to go before they’re fully prepared financially for retirement, according to Your Super Future (2015) – the latest research from ING DIRECT and the Financial Services Council.
This scenario is especially true for women. Your Super Future (2015) indicates that women are lagging behind when it comes to retirement savings, accumulating approximately $40,000 less than men in superannuation over the course of their working lives.
Not surprisingly, and in line with these findings, the report also finds that men appear to be more informed, secure and confident in their super than women are. Yet, it’s a fallacy to suggest that women are less interested than men in financial matters on the whole.
In fact, the ING DIRECT Women in Finance 2015 report shows that women are increasingly taking the lead on household finances. However, their preferences, attitudes and behaviours vary somewhat to those of men.
Providing tailored customer solutions is at the heart of any financial adviser’s business model. So, how can advisers accommodate these nuances when offering tailored superannuation advice to women? ING DIRECT’s Women in Finance offers some telling insights:
1. Financial goals
Financial security and the ability to fund a comfortable retirement are key priorities for women. They are increasingly interested in investing, but they need help with how to go about it. Women also prefer to take their time when making decisions and are more likely to ask questions and gain clarification, so when you are advising female clients focus on providing clarity of information and consider guiding them towards online tools which may assist their decision making.
2. Time in paid workforce
It’s a fact that women are more likely than men to take time out of the paid workforce due to maternity leave and subsequent primary childcare responsibilities. So women often have a lot of ground to make up when it comes to saving for retirement.
There is room for advisers to highlight simple yet effective ways in which women can boost their super, for example making additional contributions, switching to a low/ fee free fund which provides value for money and consolidating multiple accounts into just the one.
3. Attitude to risk
When it comes to building assets, women invest differently to men. They tend to have a lower appetite for risk so favour more conservative investments, and appear more interested in achieving stable returns over the longer term rather than chasing exponential growth. It’s likely then that women may choose super investments which are cash-based or opt for a balanced/ default fund option, however if they do so then they may be missing out on opportunities to grow their assets and close the superannuation gender gap.
Consider educating clients on the importance of a diverse investment portfolio. Spreading super across a wide range of investments could help them reduce risk across their portfolio while still helping them enjoy strong long term returns.
The information is general in nature and does not constitute financial advice. It does not take into account objectives, financial situation or needs and you should consider whether it is appropriate. ING DIRECT is a division of ING Bank (Australia) Limited ABN 24 000 893 292 AFSL 229823, Australian Credit Licence 229823.
