A $109 million boost to women’s economic security means more women are going to be in need of financial advice in the years to come, and this presents the Australian finance industry with opportunity of redemption.
Reforms to superannuation to help domestic violence victims, simplifying family law settlements and scholarships to recruit more women to the finance sector are some of what’s in the government’s recently announced Women’s Economic Security Statement.
For me these 3 measures, which are part of a package of some 17 initiatives, are a sign the federal government is serious about improving the economic security of Australian women, which is a problem we often hear about through the gender pay gap, retirement savings gap, homelessness and financial abuse.
For the Australian finance industry, these measures also present an opportunity to better support women in achieving financial independence through quality advice.
They are also very timely given the Royal Commission’s findings on misconduct in the advice and the industry reputational damage caused around trust.
Here’s what you need to know.
Early access to superannuation for victims of domestic violence.
The Government will extend the ability to access early release of superannuation to victims of family and domestic violence.
An estimated 17 per cent of women have experienced violence from a current or former partner since the age of 15.
There’s no question that more is needed to help those affected by domestic violence particularly given that financial hardship is often cited as one of the primary reasons why women stay in an abusive relationship.
But on the other hand, depleting the superannuation balances of women who are more than likely to already have inadequate retirement savings could create other problems.
“I think it’s a great initiative but the speed of accessing funds in an emergency and assisting women if they deplete their retirements savings are problematic,” said Jacqui Coghlan, Client Services Manager at ADA Group Accountants and Financial Advisors.
“I think the money could have been better spent on supporting financial counsellors and linkages to free financial advice in domestic violence situations.”
The Association of Superannuation Funds of Australia (ASFA) praised the new measure and says it plans to work with the government to implement the reforms.
“Domestic and family violence is the principal cause of homelessness for women and their children,” said CEO Dr Martin Fahy.
“Often, physical violence is accompanied by financial abuse, which can make it difficult for a partner to leave the relationship. On this basis we have advocated for extending early release of superannuation to circumstances of domestic violence.”
Better visibility over superannuation assets in family law proceedings.
The visibility of superannuation assets is about to get a lot clearer when it comes to relationship breakdowns.
Government will develop an electronic information sharing mechanism between the Australian Taxation Office (ATO) and the Family Law Courts to allow the superannuation assets held by relevant parties during family law proceedings to be identified swiftly and more accurately.
Allowing the ATO to provide this information to the Courts will reduce the need for such exercises and ensure more just and equitable superannuation splitting outcomes.
It’s another measure that ASFA welcomes. “We support the development of tools that assist parties to create super splitting orders, including a tool to look up the legal name and contact details of super funds,” said Dr Fahy.
Getting more women working in finance
The finance industry and organisational bodies have been actively trying to recruit more women to the sector for sometime, and now the government wants to speed things up.
The government has committed $2 million over four years for an additional grants round through the Women’s Leadership and Development Program to fund scholarships for women in accounting, finance and economics related fields.
The scholarships aim to recruit more women to the sector and support those professionals who are trying to help women facing financial difficultly.
The grants will be focused on encouraging more women to study accounting, business, finance and economics, renew or up skill in these areas, and assist more women to enter leadership roles in the economics and financial services industry.
If it’s something you are interested in, applications can be made via an open tender process, which is open to organisations, education providers, and institutions.
Advantage will be given in the grant application process to applicants who can demonstrate their scholarships will also target cohorts of women facing different or heightened barriers to economic security, such as rural and regional women and women re-entering the workforce after caring responsibilities.
If you’re looking to attract more female advisers, or clients, or even just better supporting women around financial literacy and financial independence then making yourself aware of these initiatives should be high on the agenda. Marketing to women based on improving their economic security is likely to be more successful in repairing industry trust, than staying the traditional sales-based course of advice and money-making products.
Bianca Hartge-Hazelman writes on women’s money matters and is the publisher of Financy and The Financy Women’s Index
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