Women left behind

Financial advisers are being urged to consider what they can do to get more women engaged with their financial futures.

Thursday, July 7th 2016, 6:00AM

by Susan Edmunds

Laura Abba, ANZ’s head of product services and customer experience, funds and insurance, is to address the High-Cost Chromosome forum run by the Retirement Policy and Research Centre later this month.

She said there was a gender gap for women in both investments and insurance, and women were significantly falling behind financially. “The conversation needs to be broader going forward, rather than focusing on the gender pay gap.”

The expected “savings gap” – the difference between what men and women will end up with on average in their KiwiSaver accounts on retirement, has now increased to 37%, from 28% last year.

Abba said that was partly because of the time women sometimes took out of the workforce for family and because they tended to invest more conservatively than men. “That can have a big impact on outcomes.”

Fifty-seven per cent of members in conservative funds are women.

ANZ sees a decline of 0.8% per year of age in women holding life insurance and a lower sum assured on average for women. There is a decline of 0.4% per year of age for women with income protection.

But women were twice as likely as men to make an insurance claim due to disability developed after falling ill at age 45.

Abba said financial advice needed to be made appealing and accessible to women. Feedback from ANZ’s own advisers and focus groups indicated that women tended to fall into three types: those who were readily engaged with their finances, those who tended to be only engaged at a household budgeting level and those who were ignorant and happy to be that way.

Abba said the latter two were not likely to seek advice and would perceive it as something that was irrelevant to them.

“It’s about starting a conversation that is a bit more meaningful to women,” she said.

The traditional method of allocating a risk profile and then placing an investment accordingly would not necessarily be a good fit, she said.

Advisers should stop talking about solutions and help women translate their goals into investment decisions, with tools to help them value their household contribution.

“Women tend to think about it from a goals-based investment solution. They might want to save for retirement or want to have the money to help their kids into a first home. That goal drives the investment and that’s how their risk tolerance should be worked out.”

Tags: financial advisers Income Protection Insurance Advisers investment Life insurance