The equality theme is highly topical in our society today.
Australians will soon learn the outcome of a postal vote on same sex marriage. Leaving out the politics, the ‘postal plebiscite’ is essentially a heightened version of another long-term, slow-burn societal discussion we need to have.
By this I mean the debate around financial equality between Australians of different gender.
One of the motivating factors behind our firm is the empowerment of all people irrespective of gender or sexual preference, to make better decisions – ideally with a financial adviser - about their money.
Quality financial advice should be a cornerstone in the life of every person. But women, given the inequitable social and economic dynamics at play, need in my view to work harder, sooner on the path to financial security and lifestyle choice.
Women would ideally be in a position where they can fund not only their own retirement, but their own lives should they need to live independently.
Women need to be prepared for life’s events. This may include maintaining earning capacity while raising children. This is where accessing maternity leave is so important. And good lower cost childcare. And equal opportunity employment. Employers need to improve parental leave schemes, the concept of paternity leave, rather than the concept of maternity leave, shared leave for raising children.
Other important elements on my wish list?
- More flexible superannuation arrangements within the accumulation phase, where women typically have interrupted work patterns
- More involvement by women in the family finances – breaking down some of the cultural or societal ‘norms’ that may dictate the male as the dominant partner
- Behavioural change within organisations to develop positive models for affirmative action based on gender
- Mentoring and supporting women in their professional development into executive roles
Why? Because it’s a fact in our society that a major imbalance is at play. Men typically hold more wealth than women – a lot more wealth. Male wages are higher, as are bank account balances and superannuation accounts.
Much of this is due to entrenched inequality in many areas, including rates of pay, job promotions and career choices. Women typically have interrupted working lives, and often struggle to make up the gap when care duties diminish and they return to work.
People employed in high-paying roles such as company directors, chief executives, surgeons, and judges are often men. More than men, women move into low-paying jobs such as nursing, cleaning and caring for the young and elderly.
Even in traditionally heavily unionised occupations where women have a voice, their salaries are lower than those of men. Take school teachers, for example. The average weekly earnings for a male high school teacher was $1,628 in May 2016, compared to just $1,487 for females, according to data from the Australian Bureau of Statistics.
For primary school teachers, who are mostly women, the average weekly earnings were $1,273 for females, compared to $1,581 for males. That’s a $308 difference a week in a male teacher’s favour or over $1,300 a month. Over a life time, that adds up to a huge inequality of earnings.
In white collar occupations where there is a near equal representation of men and women, yet significant wage inequity exists. For solicitors, average weekly earnings for men were $2,007 in May 2016, compared to $1,814 for women. That’s almost $200 less, a greater discrepancy than for the $141 difference for primary school teachers.
According to the National Centre for Social and Economic Modelling (NATSEM), even when women and men appear to be relatively equal according to some measurements, there are other dimensions of economic inequality. For example, while the wealth levels of those working in high-status occupations are not dissimilar on average, there are many fewer women within high-status occupations, such as surgeons or judges.
Such discrepancies often translate into relative poverty for women during retirement, as well as increased reliance on government support and pensions, according to NATSEM.
Advice is the key – both career and financial
So - what do women need to try remedy some of these inequalities? Good career advice is essential. As is financial advice. And that advice should be accepted from a young age, before social norms take over and women move into the lowest paying jobs.
Good financial advice is essential. Often this can be at the most basic level. For example, educating women on how to set financial goals and putting aside a portion of their wages each week to save money. How to salary sacrifice. How to take advantage of the government’s superannuation co-contribution. How to claim Centrelink payments.
Women can take steps to empower themselves through knowledge. And financial advisers have the skills and information to help women boost their financial independence and wealth.
Our firm is doing its bit to help empower Australians, but women especially, with the tools, education, and knowledge to make better financial decisions in concert with an adviser and take charge of their own finances as effectively as possible.
We aim to help bridge the gap between men’s and women’s wealth levels.
a.i seeks to bring financial advice to more people, in an approachable way. Designed to be used on all web-based devices, a.i. is a toolkit that works wherever you do, delivering a simple, and user-friendly experience.