When it comes to women and wealth, a recent report by a leading financial institution* revealed a number of interesting findings. Firstly, and not surprisingly, Australian women have diverse financial circumstances ranging from insufficient superannuation, to being the beneficiaries of vast amounts of money as they outlive their older Baby Boomer husbands.
There is also a growing subset of very high earning Gen Y and Gen Z women represented in Australia’s emerging affluent.
The findings are as diverse as the women surveyed, and while there can be significant differences in stage of life and circumstances, there are also commonalities.
More than half the women surveyed indicated they were confident they would achieve their financial and wealth goals and of those, a resounding 70% of Gen Y and Gen Z women believe this to be true. And for good reason.
Gen Y and Z women (under 42 years of age) are more engaged in investing and the survey found them to be more financially literate than their Baby Boomer predecessors (57-75 years).
Further, Gen Y women (together with their male cohort) make up the largest workforce segment with approximately 11% of them being among Australia’s emerging affluent.
It seems clear, women generally are proactive in making the most of their earnings and wealth opportunities.
Another common financial thread for women is their definition of financial success. It largely relates to not being stressed about their finances and having enough money for unexpected expenses and enjoying life (with 39% putting an emphasis on having enough for a holiday) and for a comfortable retirement.
For women with higher household income, financial success is also defined by knowing they can retire at a time of their own choosing. Financial security, freedom and stability are consistent goals across all age and lifestyles of the women surveyed. However, to achieve those goals they must navigate challenges often unique to their gender.
These include the gender pay gap, need for maternity leave and flexible working conditions and accommodating their generally longer life expectancy which also impacts their long-term financial circumstances.
While over half of all women feel confident they’ll achieve these and other financial goals, the other half, especially older women, are not particularly prepared. In fact, the survey indicates the majority of single women over 50 are not prepared for retirement at all.
While women are generally confident managing their day-to-day finances, findings reveal they are considerably less confident making superannuation investment decisions, starting a share portfolio and purchasing investment properties.
Interestingly, women who are often younger than their Baby Boomer husbands, are outliving them and on their passing, taking control of what can be significant wealth.
As the key family wealth decision maker, these women often feel unprepared for the task of managing family finances and guiding the future wealth transfer to next generations.
However, that’s not to say women aren’t interested in wealth management and financial education.
Emerging affluent women in particular are keen for financial coaching and education which they commonly seek through their professional networks and via resources including specialist investment podcasts, blogs and websites. They also appreciate the value of qualified advice and commonly engage a financial adviser.
Certainly, this is my experience as a financial adviser and wealth professional.
The women I advise, as individuals and part of a couple, usually have clear financial, career/business and lifestyle goals. They are well informed generally, and actively seek to understand their wealth options that guide independent decision making.
Often they are looking for a financial sounding-board and opportunities for discussing a raft of matters that are specific to their circumstances for achieving the before mentioned goals of security, freedom and stability.
These discussions often address catching up their superannuation, which is generally less for women due to lower earnings and often having to leave paid employment to care for children or ageing relatives. Additional tax effective super contributions, spouse contributions, super splitting as well as age considerations for accessing super, are among the topics often worked through.
I’m also asked to contribute to discussions about career and personal issues that are separate from but can impact their financial priorities.
Matters such as separation, divorce and re-partnering, remuneration matters when making career changes and making the most of surplus cash for super, debt management and investing among the diverse issues often put on the table.
For my clients, and particularly for the women I advise, achieving financial security commonly involves implementing financial protection strategies for personal risk (unexpected illness or accident), asset protection, making a will and putting an estate plan in place.
As the survey attests, there are many financial, career and lifestyle considerations that impact women differently from their male counterparts, and whether they are part of a couple or family group or as a single person.
For younger women seeking qualified advice and financial mentors for guiding their decision making and growing their financial knowledge is key. For high earners among the emerging affluence, being fully across the financial complexity that comes with remuneration packages that often include executive share scheme, will enable sound tax-efficient financial decisions that can boost personal wealth.
For women (and men) who feel financially unprepared, qualified advice will provide both financial expertise and support for planning their retirement or shouldering the responsibilities of managing their family’s wealth and legacy.
In this article I’ve only scratched the surface of financial, tax, legal, career and lifestyle matters that make up an individual’s financial life.
If I can be of assistance, please take up my offer for a 20-minute no-strings attached discussion.
To find out more about holistic financial planning based on a collaborative advice team approach, that effectively manages financial complexity affecting high earning executives and business leaders, please give me a call on +61 (0) 7 3007 2080 or email contact@executivestrategies.com.au to request a call back.
To learn more about James Marshall, visit this link.
*www.netwealth.com.au
Executive Strategies is a specialised information hub for executives and senior managers who may have founded their own business or who work for growing private, ASX listed companies or government businesses. Its purpose is to provide access to specialist advisers and information that addresses the often-complex issues affecting their personal prosperity.
Stratus Financial Group and its advisers are Authorised Representatives of Fortnum Private Wealth ABN 54 139 889 535 AFSL 357306. This advice is general and does not take into account your objectives, financial situation or needs. You should not act on it without first obtaining professional financial advice specific to your circumstances.
Please note: For advice and services relating to this matter that are not offered under the Fortnum Private Wealth AFSL, in accordance with our collaborative advice model, when required, such matters are referred to appropriately qualified professionals.
