A teenage girl with her mother and grandmother at home. Family and generations concept.
Team Intello
Team Intello

SMSFs Helping Female Investors Close the Superannuation Savings Gap

How Advisers Can Support Women Through The “Financial Tidal Wave” of Change

Most Australian women today retire with almost half as much in superannuation savings as her male counterpart. The “superannuation savings gap” is the result of numerous factors currently under examination by Federal Government.

Self-managed superannuation funds, meanwhile, are making significant progress on closing the super savings gap, with female SMSFs currently averaging 84% of male balances.

Progress on closing the gap is speedy, too. Since 2017, SMSF balances held by women have continued to grow at a rate higher than those held by men. In June 2022, the ATO found the average female SMSF balance of $745,000 to be up 18% on 2019-18 figures and up by 30% on 2016-17 savings. At $882,000 meanwhile, male balances increased, on average just 16% on 2019-20, and 26% on 2016-17 balances.

Indeed, young women have contributed to significant growth in newly established SMSFs in recent years. The availability of more educational resources, greater female participation in the workforce – including greater business ownership and higher management positions – means women are becoming more active in their financial management and superannuation investment decisions. 

Further, if we follow trends in the US and the UK, Australian women are set to inherit most of the looming $4.9 trillion intergenerational wealth transfer. Many are also going to either outlive their spouse or must manage financial matters following divorce.  

Industry experts know that more money a woman has, the more likely she is to want more management and control over her wealth. Women are, therefore, only more likely to be drawn to SMSFs and advice to achieve greater financial independence and their retirement goals.

Research: Women Seek More Financial Advice Than Men

Data shows us that male and female trustees have distinct investment profiles and information needs.

In the 69 percent of SMSFs which are jointly held by two members in a husband and wife structure, it’s most often the man that is the primary decision-maker.

Consequently, women are less confident managing their SMSF than men, and, in 2022, Vanguard found female trustees seeking more advice on their investments than their male counterparts.

Given that, at 47%, women represent almost half of SMSF members, perform more unpaid work, and have a longer life expectancy than men, more can be done to ensure women are empowered to manage their retirement savings and continue to close the superannuation savings gap.

Women want more financial advice than their male counterparts but they’re often wary of approaching advisers.

Further, events such as divorce, loss of employment or death of a co-trustee whilst managing an SMSF are extremely common. So, it’s vital that women feel as confident managing retirement savings and investments throughout the entire lifecycle of their SMSF as their male co-member.

What Investors Want From Advisers

While female SMSF investor numbers are on an upward trend, research finds use of an advisers stagnating. For example, just 19.6 per cent of the total advised SMSF holdings among AUSIEX clients are women.

Similarly, Vanguard’s ’22 Annual SMSF Report found just 27% of SMSF members had received financial advice in the last 12 months, and recent ATO data indicates that only 53% of SMSF funds are currently advised or on an advised platform, leaving 43 percent directly held. In contrast to the data, however, multiple studies indicate SMSF trustees want more financial guidance. Specifically, SMSF members desire more strategic advice, information on good buying opportunities, and help with understanding regulatory updates.

Vanguard 2023 SMSF Report.

Research by JBWere released last month found high-net worth women used a female adviser because they felt a fellow female was more likely to understand their life situation.

Vanguard found the main reasons SMSF members don’t pursue advice are trust issues, poor experiences with advisers in the past and unclear costs.

Looking Ahead: Advisers And Female Investors

In the next ten years, more Australian women are set to establish SMSFs, to not only create their own wealth, but to inherit most of the looming intergenerational wealth transfer, too.

Unfortunately, the beneficiaries of the largest transfer of wealth in history are likely to also suffer complexities and conflict due to modern ‘blended’ family structures.

Demand for support from advisers and estate planning professionals, therefore, is crucial to ensure women are empowered to effectively manage finances for themselves and future generations.

More financial advisers, especially female providers with clear fee structures, and those who regularly provide updates on regulatory updates, including SMSF investment options have exciting opportunities before them to provide massive value to this emerging market.

Set to inherit most of the intergenerational wealth transfer, women need the support of advisers to ensure they’re empowered to manage finances for themselves and future generations.

For more on SMSF administration services for advisers and accountants from Intello, click here.

Share this post

Subscribe to Intello News

Get the latest news & offers by email as it happens.

Cookies Notification

Intello use cookies on this website to offer a faster, more personalised browsing experience + analysis of our website traffic. By clicking 'x' or by using this website, you consent to our use of cookies (unless you have disabled them). More detail is available via our Privacy Policy.