Not incorporating the client’s gender when considering whether the advice is appropriate

Female clients are typically under-superannuated. This is definitely because they typically spend less time in the workforce and earn less than men. It may also be because women have been found to spend more money on their children than men do – at least in developing countries. There is even evidence that women pay more for day to day products such as deodorant and razor blades. It’s a man’s financial world.

As a result, women’s super-contributions and subsequent balances are lower. It’s not rocket science and it’s a growing problem. It becomes especially unfortunate when we remember that that women can also expect to live longer than men. So, on average, women have less super, and it has to last longer, than men.

Statements of advice should address this issue head on and stress that super contributions must start earlier, remain larger and continue for longer if retirement is to be financially comfortable. Some other things to consider include:

  1. Partnered, male full-time employed clients should be reminded that their super contributions  need to cater for their partner’s retirement as well, especially if she is currently not working full time in paid employment due to child-raising commitments;
  2. Self-employed clients who are partnered should be encouraged to employ both spouses and superannuate them equally – many self-employed clients see themselves simply as employees of their own business and thus restrict the compulsory 9.5% contributions to the account of the member of the couple working in the business; and
  3. Female clients who are not legally married but are taking time out of the workforce to raise children as a member of a partnership should be encouraged to consider whether they are adequately covered in the event of a relationship breakdown.

Having made such recommendations, it can be a good idea to refer female clients to and ask that they read these materials closely to understand why you are stressing the need for earlier, bigger and longer super contributions in your advice.

This fact sheet is particularly pertinent: Women and Super and should be appended to every SOA recommending super to female clients.

The Dover Group