I took great heart from the report recently released by the Self Managed Super Fund Association and the Commonwealth Bank examining the differences between men and women SMSF trustees. For me, the key finding was not that women, who comprise 47 per cent of all SMSF members, were less confident than men (62 per cent versus 83 per cent) in managing their SMSF, but that such a high percentage of women believed they had the necessary skills and confidence to oversee their fund.
Make no mistake; I want that 21 percentage point gap to narrow – and to happen sooner rather than later. But I suspect the figure of 62 per cent jolted quite a few in our industry who had assumed that it was predominantly the male who was comfortable in making the decisions (especially investment related) in a husband-wife SMSF. (72 per cent of all SMSFs have more than one member, and of these 88 per cent have partners or spouses as members.)
So it’s worthwhile peeling back the layers of this report to have a closer look at what it says. But keep that 62 per cent in mind, because it puts the SMSF sector into perspective as a sector where women are increasingly assuming a bigger role in managing investments.
The survey was comprehensive, involving 801 SMSF trustees, as well as 535 individuals without an SMSF, with the brief to better understand the behaviours, confidence and satisfaction levels and outlook of SMSF investors with different demographic profiles.
Control, flexibility and saving money
For most members the three prime reasons to set up an SMSF are control, flexibility and saving money on fees. Drilling down a little further, the report found that men are more motivated by investment factors, and what they offer; 55 per cent of men compared with 45 per cent of women establish an SMSF to gain more control over their investments. More specifically, this relates to the capacity to choose specific shares (23 per cent versus 15 per cent), a conviction they can outperform APRA-regulated funds (19 per cent versus 13 per cent) and dissatisfaction with the poor performance of their previous super fund (18 per cent versus 11 per cent).
What is interesting here is not that men are more motivated by investment factors, but the fact the difference between the genders is not stark; 55 per cent versus 45 per cent is hardly a chasm of Grand Canyon proportions.
It’s little different when it comes to asset allocation; men lead the field but women are not far behind. On investment in Australian shares, it’s 55 per cent versus 46 per cent; on bank cash management accounts its 23 per cent versus 15 per cent; and with hybrid securities it’s 11 per cent versus 4 per cent. True, the research shows that, in general, men are more confident understanding different asset classes compared with women. But it’s not a bridge too far.
More aggressive strategies
Confidence in understanding of share trading shows a bigger gap between men and women, specifically in relation to Australian shares, international shares and exchange traded funds (ETFs). Interestingly, when asked to consider the longer life expectancy among women, more than half of all SMSF trustees (56 per cent) believe women should adopt more aggressive investment strategies so they can better support themselves in retirement.
The research found that about half (49 per cent) of SMSF trustees were “very confident” that following a separation or divorce and their partner ceasing to be a trustee that they would have sufficient knowledge to take over sole responsibility for managing their SMSF investments. Again, this would surprise some in the industry, but considering nearly one-third (32 per cent) of funds surveyed with more than one member make their decisions jointly then it’s not that hard to understand, especially when more than half this number (54 per cent) do so on an equal basis.
Women more than capable
That women have the capacity to adapt is indicated in the finding that after separation, divorce or death of a co-trustee, women are more likely to make changes to their SMSF in line with their own investment goals (41 per cent) while men are more likely to maintain the strategies already in place (53 per cent). This suggests to me that those women who have been passive players in an SMSF are more than capable to take the reins when circumstances demand it.
It’s an encouraging snapshot of where our superannuation sector is right now. At a time when there is rightly a lot of discussion about the inequity between men and women when it comes to superannuation, this report paints a picture of women being more actively engaged than many suspected. Now it is time to provide women with a service that assists them to bridge that gap entirely.
