The Gender Wealth Divide: Why are women financially disadvantaged?
21 Sep 2010 | 3 min
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Did you know that gender is a significant macroeconomic variable determining an individual’s financial wellbeing?
And while it could be dismissed as an issue for the individual, leading organisations are taking greater responsibility for their people’s wealth and retirement adequacy. As one senior manager said “we know we are adding value as an organisation when more than 90 of our people choose to spend their lunch break learning about personal financial strategies”.
In this article, we highlight the nature of the gender wealth issue, share key opportunities raised by the World Economic Forum report and outline real life cases of how forward-thinking organisations have started to bridge the gender wealth divide.
The nature of the gender wealth divide
- Australian women on average retire from the paid workforce with less than half as much money as men – yet women live longer than men.
- Women’s ability to accumulate wealth is impacted by various systemic factors including the gender pay gap, the tendency for female-dominated industries to be less well remunerated, the tendency for women to have career breaks and to work part time.
- This is compounded by behavioural factors – compared with men, women are typically less confident about investing, less knowledgeable, and more risk-averse.
The World Economic Forum calls upon employers to empower their employees financially
- Employers have an opportunity to make a difference for both female and male employees – by implementing the type of “high impact” strategies recommended by the World Economic Forum.
- The Forum argues that employers need to take greater responsibility for the health and retirement security of their workforce.
- It promotes a range of ‘high impact strategies’ to promote enhanced financial wellbeing including:
- Providing financial education and planning advice – so that people can make informed choices and take effective action to ensure an adequate retirement income.
- Encouraging higher levels of retirement savings.
- Enhancing pension [superannuation] fund performance - particularly through the design of investment strategies.
- Among the actions it recommends for employers to move toward 'cutting edge practices' are financial education programs and enhanced retirement benefit initiatives.
Please contact Multiforte if you would like a copy of the full report.
Taking ACTION - what are forward-thinking Australian organisations doing?
Multiforte is partnering with a range of leading organisations to deliver on the types of ‘high impact’ strategies recommended by the World Economic Forum.
These include programs for different age segments as well as programs designed specifically for women, which makes them very different from traditional financial literacy or superannuation seminars.
“We like Multiforte’s financial education sessions as they’re completely different to the old-style seminars run by the super fund. They are tailored to our people, they are interesting, entertaining and receive excellent feedback – with average scores of 4.5 out of 5 we know this is a real positive for our people, and our firm.”
Financial education programs
For several professional services firms, we have conducted a series of financial & lifestyle goal seminars, designed to help employees clarify their life goals, and start to identify what financial resources and planning they need to achieve them. We also discuss specific strategies designed to match the interests of different employee segments. For example:
- We have an interactive session called “Strategies for gaining a financial headstart” for people who are building their wealth.
- For people who are more established, we discuss “Six ways you can be smart about money”.
- For women, we run a seminar on ways women can be smart about money.
- For people interested in investing, we look at how they can use academic investment research and tax strategies to have the best chance of achieving their financial outcomes.
Enhanced retirement benefit initiatives
Multiforte also offers one-on-one financial health checks for senior executive or manager level staff to assist them in making financial decisions. This is particularly relevant for people within ten years of retiring to help them achieve adequate retirement monies and for the organisation, to assist with retention of these key staff.
If you would like to discuss opportunities for your organisation, we would be delighted to help. Please contact Multiforte on 02 8209 1607 or email tclark@multiforte.com.au
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