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Lower risk tolerance dents women’s super
Lower investment risk tolerance among women across all ages than men could be slashing women's cumulative savings and superannuation balances over many decades, a national survey reveals.
National Australia Bank (NAB) Asset Management's first analysis of gender based risk preferences of men and women in Australia revealed that the percentage of women with a high risk allocation was at just 30 per cent across all age groups, 7.5 per cent lower than men.
This could mean women were losing tens of thousands of dollars in potential savings, the survey of more than 100,000 advised clients around the country showed.
NAB Asset Management portfolio specialist, Kajanga Kulatunga, said asset allocation differences between men and women could have significant long-term ramifications in savings gaps.
"We believe this is the first major study in Australia to demonstrate that women's lower super balances are not only impacted by career breaks and lower pay but also investment preferences," he said.
The research, based on more than 100,000 advised clients around the country, found that the difference in high risk allocation among women in the 30 to 40 age group is five per cent, while it was nearly six per cent for those in the 60 to 80 age group.
The research also found female investors switched their asset allocation 20 per cent less frequently than men.
NAB general manager of corporate superannuation, Lara Bourguignon, said the results were not surprising, given women 57 per cent of women were less likely to feel prepared for retirement, compared to 32 per cent of men, while over half of women who were retired feared outliving their savings.
"When we look past the super balance differences and dig a little deeper into how Australian women feel about their financial position, we find this lack of confidence seems to contribute to holding women back from bridging the retirement gap," Bourguignon said.
The research also explored whether anatomical differences in the male and female brains influenced investment choices.
"We need to be careful about liberally throwing the phrase ‘financially illiterate' to describe the financial choices women make," Kulatunga said.
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