Bridging the superannuation gender gap: what can advisers do?

ING DIRECT’s Executive Director Customer Delivery Lisa Claes reports.

It’s an all too troubling reality: despite women taking a leading role in household decision making (ING DIRECT Women in Finance, 2015), they are still lagging behind men when it comes to building a super balance which will sustain them comfortably through their retirement years.

According to the Association of Superannuation Funds of Australia (ASFA), women accumulate an average of $105,000 in super upon retirement, compared to an average balance of $197,000 for men – and it’s not difficult to work out why.  

Women commonly take more time out of the workforce than men do, initially due to maternity leave but often followed by an extended period of child-rearing. Whether women with children return to paid work full-time, part-time or not at all, they are, to a varying extent, missing out on employer super contributions for the duration of their absence from the workforce.  

While this is a trend which is unlikely to change substantially for the foreseeable future, it clearly has repercussions on women’s financial wellbeing in the longer term.  So how can you, as a financial planning professional, both address the ways in which women could make a difference to their retirement planning as well as adapt your approach to take into account the nuances of the female cohort?  

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Provide greater control

Only a third (30.6%) of women feel their retirement saving is under control (ING International Survey 2015), but there are things they could do to influence more fruitful financial returns.

Confidence may be increased through greater access to knowledge, so look at ways in which you can provide your clients with clarity of information. For example, some funds make it easier for customers to check their super balances in real time via mobile apps, helping to keep super front of mind.

Look at other means of simplifying the way information is presented and consider evolving your service offering to incorporate online tools and calculators which enable women to engage easily.

Minimise fees

According to Your Super Future (ING DIRECT/Financial Services Council, 2015), the propensity to switch funds is on the rise. Yet, one in five Australians still have multiple funds which could mean they are also shelling out more than they need to on fees.   

Fees can eat into super balances substantially over time – a fact which may be more detrimental for women – so highlight the importance of choosing a low/no fee fund which offers value for money, and then consolidating multiple funds into just the one.

Diversify assets

Having a diverse range of investments is an integral component of wealth building, yet research shows men and women approach investments differently.  For example, women tend to be more risk averse, and place greater emphasis on long term financial stability, rather than growth (ING DIRECT Women in Finance 2015) so take these nuances into account when tailoring your advice.

While there is no ‘quick fix’ for fully addressing the superannuation gender gap, adopting a segmented approach to financial planning is a start in helping women take control of their super and thus enhancing their financial wellbeing in retirement.  

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.