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How funds and managers fail women
Lisa Claes
Women have different investment wants and needs than men, make their choices differently and, increasingly, are the more important influencer of choice in the household. But the industry is failing them. Super products such as fee holidays when there are no contributions – during child bearing and rearing – could be very attractive.
This is the main conclusion of a report from ING Direct and Women & Finance launched at an industry event in Sydney last Friday. Because of demographics, women are going to be the main beneficiaries of the coming $2.4 trillion intergenerational transfer of wealth due to the babyboomer bubble.
The report found that:
> 93 per cent of women are either the main financial decision-maker or joint decision-maker
> 84 per cent would be confident in taking on all financial decisions
> 31 per cent currently receive professional financial advice
> 35 per cent would use a financial planner if they came into a substantial inheritance
> 34 per cent would turn to family and friends for advice.
Lisa Claes, ING Direct executive director of customer delivery, who presented the findings, said: “Women identify with feeling a responsibility to preserve wealth, particularly inherited wealth, and to leave a legacy for the next generation. For women, the focus is often on ‘making it last’ rather than ‘watching it grow’.
“Sometimes the best solution is not the one which delivers the highest investment returns and it’s important that the financial services industry recognises this and adapts its approach to address some of the intangible factors that are important to women, such as consistency, longevity and security.”
For super funds, options such as a fee holiday during maternity leave or other periods when there are no super contributions going in could be very attractive to many women.
She said that the boards and management all investment companies should reflect their customer base in order to better understand it – meaning gender diversity at all levels. Increasing the proportion of female financial planners from the current estimate of about 20 per cent would help advisory firms too, she said.
The report outlines several key characteristics among women that shape their approach to financial matters, including:
> Women are more conservative investors than men, favouring capital-guaranteed deposits and investments and having a higher exposure to cash and fixed income
> The top financial concerns for women are feeling financially secure (59 per cent) and having enough for a comfortable retirement (57 per cent)
> Women want to be empowered to make wise decisions and will actively seek out expert advice – 31 per cent currently receive professional financial advice and 35 per cent would seek professional financial advice if they came into a substantial inheritance
> Women tend to take their time and ask more questions – gathering insights to make informed decisions rather than operating in ‘fight or flight’ mode
> For women, referrals play a significant role in their financial decision-making, and they place a particularly high value on the opinions and recommendations of other women, be it through close relationships or social media communities.
