Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 296

Most women say unprepared for retirement

International Women’s Day represents a moment where, among many other things, it’s appropriate to consider the extent to which the historical gaps that women have faced in investing and financial matters are being addressed. Findings from researcher Investment Trends shows that females are joining the active online investor population in Australia at increasing rates, but there’s a long way to go before we reach parity.

Online brokers improve access

Online brokers have allowed a large number of Australians to take control of their investing by providing easy access to direct equities and ETFs. The good news is that there has been a significant increase in the number of female online investors over recent years, with their numbers doubling from 76,000 to 150,000 between 2013 and 2018. More women are building their wealth and moving towards an independently secure financial future, but even with this strong growth, women still represent only 20% of Australia’s online investors.

ETFs are also playing an important role for female investors. Among the Australian online investor population, the proportion of females who invest in ETFs increased more than threefold in the last five years from 7% to 25%. To put the popularity of ETFs into perspective, the proportion of females who invest in managed funds has remained steady at 18% over the same period. Clearly the ability of ETFs to provide convenient, low cost access to a diversified investment portfolio resonates strongly with female investors across Australia.

Our latest research also reveals the importance of ESG factors to female investors. When it comes to their investment selection process, 29% of women say it is ‘very important’ that their portfolio contains companies that have good ethical, social, environmental and governance standards (vs 19% for male investors). This preference increases with age, with 34% of retired women seeking strong ESG performers in their portfolio (vs 19% for retired males). The growing number of ESG investment products in Australia means all investors who want these issues embedded in their portfolios will have more choices that meet their investment philosophy.

Readiness for retirement

We also have data on retirement on how well-informed women feel, and the proportions of women who say they are well-prepared, as follows.

Australians have access to a vast range of online tools and resources to learn about investing and money matters, but they want more. Given the mounting challenges faced by Australians in building their wealth, planning for their retirement, and affording a reasonable lifestyle throughout their retirement, it is vital we lift financial literacy levels and retirement preparedness across the country.

Women live longer, creating financial anxiety

It is also vital that the industry delivers products and services that meet the needs of older Australians, and particularly older Australian women. With only 22% of Australians aged over 40 saying they are confident they can fund the lifestyle they seek in retirement (14% among women), an ever-widening gap in confidence and affordability exists. As Australians live longer than many planned, and as women continue to outlive their partners, this need will continue to intensify, creating enormous financial anxiety at times when stress is already high.

While more women are investing and taking control of their financial future, the gap between the independent financial security of men and women remains too large. The wealth management industry needs to increase its focus on delivering products and services that work for women, and work for them at every stage of their life – young, middle aged or mature; single, partnered or widowed.

 

Suzie Toohey is Global Head of Client Service and Sales at Investment Trends.

 

RELATED ARTICLES

How do women really invest?

Five lessons from the 'Witch' of Wall Street

Best and worst performing equity funds of 2020

banner

Most viewed in recent weeks

Three steps to planning your spending in retirement

What happens when a superannuation expert sets up his own retirement portfolio using decades of knowledge? He finds he can afford much more investment risk in his portfolio than conventional thinking suggests.

Finding sustainable dividend stocks on the ASX

There is a small universe of companies on the ASX which are reliable dividend payers over five years, are fairly valued and are classified as ‘negligible’ or ‘low’ on both ESG risk and carbon risk.

Retirement income promise relies on spending capital

The Government has taken the next step towards encouraging retirees to live off their capital, and from 1 July 2022 will require super funds - even SMSFs - to address retirement income and protect longevity risk.

Among key trends in Australian banks, one factor stands out

The Big Four banks look similar but they are at fundamentally different stages as they move to simpler business models. Amid challenges from operating systems, loan growth and neobank threats, one factor stands tall.

Why mega-tech growth are the best ‘value’ stocks in the market

They are six of the greatest businesses ever and should form part of the global portfolios of all investors. The market sees risk in inflation and valuations but the companies are positioned for outstanding growth.

How inflation impacts different types of investments

A comprehensive study of the impact of inflation on returns from different assets over the past 120 years. The high returns in recent years are due to low inflation and falling rates but this ‘sweet spot’ is ending.

Latest Updates

Superannuation

Retirement income promise relies on spending capital

The Government has taken the next step towards encouraging retirees to live off their capital, and from 1 July 2022 will require super funds - even SMSFs - to address retirement income and protect longevity risk.

Superannuation

How retirees might find a retirement solution in future

Superannuation funds need to establish a framework that offers retirees a retirement income solution that lasts a lifetime. It will challenge trustees to find a way to engage that their members understand and trust.

Investment strategies

Dividend investors, your turn is coming

Dividend payments from listed companies, depended on by many in retirement, have lagged the rebound in share prices over the past year. Better times are ahead but sources of dividends will differ from previous years.

Investment strategies

Four tips to catch the next 10-bagger in early-stage growth

Small cap investors face less mature companies with zero profit that need significant capital for growth. Without years of financial data to rely on, investors must employ creative ways to value companies.

Investment strategies

Investing in Japan: ready for an Olympic revival?

All eyes are on Japan and the opportunity to win for competing athletes. After disappointing investors for many years, Japan is also in focus for its value, diversification and the safe haven status of its currency.

Fixed interest

Five lessons for bond investors from the Virgin collapse

The collapse of Virgin Australia not only hit shareholders, but their bond investors received between 9 and 13 cents in the $1. A widely-diversified portfolio can tolerate losses better than a concentrated one.

Investment strategies

The 60:40 portfolio ... if no longer appropriate, then what is?

The traditional 60/40 portfolio might deliver only 1.5% above inflation in future without diversification benefits. Knowing an asset’s attributes rather than arbitrary definitions is better for investors.

Retirement

Two factors that can transform retirement investing

Retirees want better returns but they have limited appetite to dial up their risk exposure in order to achieve it. Financial advice and protection strategies in portfolios can enhance investment outcomes.

Sponsors

Alliances

© 2021 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. Any general advice or ‘regulated financial advice’ under New Zealand law has been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. For more information refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.

Website Development by Master Publisher.