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Australian Finance Podcast

How to: lose that Super Gap in 1-2-3 easy steps

19 Jul 2021

Transcription

Transcript generated automatically by AI and may contain errors.

Chapter 1: What is the main focus of Bronwyn's PhD research on Superannuation?

0.031 - 26.345 Owen

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26.786 - 44.868 Owen

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45.469 - 63.24 Owen

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63.721 - 87.261 Owen

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87.241 - 101.921 Owen

Please remember that all of the information in this podcast episode is limited to general information only. That means the information is not specific to you, your needs, goals, or objectives. So you should seek the advice of a licensed and trusted financial professional before acting on the information.

102.362 - 129.862 Owen

And before you acquire or apply for a financial product, please read the PDS or product disclosure statement, which should be available on the issuer's website. Lastly, please keep in mind that past performance is not indicative of future performance. Kate Campbell, welcome to this episode of the Australian Finance Podcast. It's good to be back, Owen. Yeah, we've got a very special guest with us.

129.882 - 135.891 Owen

One of the OGs, or the OG of the Australian Finance Podcast, Bronwyn, aka Miss Moneybox. How are you going?

136.092 - 137.093 Kate

I'm good. How are you?

137.414 - 138.115 Owen

Very well, thanks.

Chapter 2: What are the systemic barriers affecting women's Superannuation in Australia?

179.217 - 181.34 Owen

Yep. That's cool. Isn't that funny?

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181.66 - 186.926 Kate

Internet friends in real life. IRL.

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186.947 - 187.387 Bronwyn Bruce

It happens.

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187.647 - 189.169 Owen

And so you've been on the podcast before.

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189.329 - 189.57 Bronwyn Bruce

Yes.

190.01 - 201.864 Owen

But this is the first, I guess, opportunity for you to share publicly what you've been working on, which is super cool. Really exciting and we've been looking forward to doing this because Kate and I want to talk about super more often.

202.625 - 227.34 Owen

But in particular, we often come up against this huge challenge which is getting women involved in the financial conversation and particularly when we talk about investing. We see it when we do investing events, mostly men. And you've just kind of excelled in this area of trying to understand the barriers and what women can do in particular to kind of right the ship insofar as super.

227.64 - 227.861 Bronwyn Bruce

Yes.

228.362 - 235.542 Owen

So we're going to talk about that throughout this podcast. Before we get to that, Kate, can you just tell us what is super?

Chapter 3: How can women engage more effectively with their Superannuation?

384.043 - 399.364 Owen

But some of the stories that we heard coming out of that are remarkable. Why don't we throw it over to you, Bronson, that you're the expert here. I guess maybe can I just ask just from a high level, can you just explain kind of what you've been researching?

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399.547 - 429.553 Bronwyn Bruce

Sure. So I am currently undertaking a PhD at RMIT and top level, I'm researching how to engage younger Australian women with their superannuation. There's this big super gap that exists between women and men in Australia. 37%, depends on your source, but that's the one I'm using. A couple of reasons for that, the design of the system, career interruptions, and then caring responsibilities.

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429.533 - 448.808 Bronwyn Bruce

So I'm focused on millennials because research shows that this gap gets very, very wide when women and men are in their 30s. So my age range is 25 to 40. So I'm looking at what this group of women can do at this point in their lives so they don't end up

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450.695 - 475.259 Bronwyn Bruce

you know, homeless, which is another scary statistic that's been coming out in the media of women over 55 and now this rising group of homelessness in Australia. So I'm exploring the sources of self-efficacy and how they can help women to build up their self-belief, awareness and confidence to make changes today for a better financial wellbeing in the future.

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475.66 - 489.718 Kate

And it's been a bit, it's definitely been hard to date with women taking time off work, possibly in thirties, which is some of the best years for compound interest, especially if you have a 40 or 50 year working career, like the twenties and thirties are when it's so important.

489.758 - 498.15 Kate

So it's really tough to miss out of a decade of superannuation payments because maybe you're out of the workforce or only working part-time or casual for a while.

498.13 - 522.315 Bronwyn Bruce

Yeah, for sure. And, you know, in your 30s, it's really hard. I think a lot of women and men, everyone, they don't engage so much with their super because of that time difference. It's so far away. And that's something I've explored in my research as well. You know, why don't people care? What can be done about getting people to care? And I guess we'll talk about that

522.38 - 522.841 Kate

Yeah.

523.121 - 543.554 Owen

Yeah. Yeah. I've been to some of the nitty gritty. Yeah. So, and I think, I think there's, well, just from a, if I just take a step back and just think about like a 20 year old female, like the one that we just talked about, if you think about her situation where she's got half in cash, half in fixed interest, which is probably the worst allocation of super I've ever seen or heard of.

Chapter 4: What strategies can individuals use to narrow the Super gap?

613.941 - 615.463 Owen

Yes. Yeah, right.

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615.664 - 626.638 Bronwyn Bruce

Yeah, and how people interact on those and what drives someone to comment or like or share or just lurk and what people are learning in there.

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626.838 - 632.325 Owen

In a social, like an online, kind of the new age way to get information out of a social circle is online, right?

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632.345 - 632.686 Bronwyn Bruce

Yes.

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632.706 - 632.886 Owen

Yeah.

633.267 - 640.827 Bronwyn Bruce

And because advice is still something that's… Not as accessible for most people. This is where people are going.

641.107 - 662.968 Owen

Yeah, right. Okay. So I guess this is kind of cutting to the chase, I guess, but it's a good question. And Kate prepared this question, which is what can be done to level the playing field, both at the systemic level, so for the whole of Australia, and then at an individual level? What are some of the things that we can do to help close that gap?

663.37 - 683.326 Bronwyn Bruce

So at a systematic level, I guess, and this is really easy to say but very hard to do, there needs to be this recognition that gender has an effect on retirement outcomes. So the difference between men's experience of work and women's, it's different. It would be great if super could be paid on parental leave.

683.827 - 683.927

Yeah.

Chapter 5: How does combining Super funds benefit individuals financially?

768.806 - 789.885 Owen

Well, yeah, it was more like at an individual level. So what can – so we have, you know, tens of thousands of people that listen to this podcast. Yeah. What can either – if there's women listening right now, if there's partners listening, which we know there is heaps of people out there, if there's parents, brothers, sisters, what can you say to them to help –

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789.865 - 813.696 Bronwyn Bruce

the people around them or themselves to not be in this situation so this is what i'm looking at uh it's like the crux of my my work at the moment i'm looking at three encounters so it's the combine contribute and invest so what i mean by that is combining your funds so that you just have one so you're not paying multiple sets of fees or multiple sets of insurance fees and

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813.676 - 836.47 Bronwyn Bruce

contribute, so that's add more if you can, and invest, that's knowing what you should be invested in for your age or your risk tolerance. So that's three things you can do. Two of them will cost you nothing. And what you can do is to make an appointment with a super advisor at your fund. It's no extra cost. So in other words, you pay for it in your fees.

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837.051 - 846.865 Bronwyn Bruce

So you might as well take the opportunity to go and talk to someone who knows, who can give you a bit more information about your particular circumstances. I did it a few years ago. It was great, like really great.

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846.885 - 851.332 Owen

So you just go into like some of them have apps or the website and you just organize a call. Book an appointment.

851.352 - 870.43 Bronwyn Bruce

It's like an hour. And they'll tell you, you know, what would be the best thing to invest in for your circumstance. You know, like I'm hardcore aggressive investor. Because I'm like, let's just... It's a while away. It's a while away. Let's just ride this wave and, you know, and I love the stock market.

870.41 - 890.937 Bronwyn Bruce

But, you know, that's not for everyone because, but, you know, like the woman you were talking about, the 26-year-old who was in the cash fund. I mean, that's terrible because, and that happened to me actually. That's why I got interested in super. Oh, really? I moved to Australia. We didn't have, we only had KiwiSaver. I don't know if it was even a thing. And I joined a fund.

890.957 - 904.132 Bronwyn Bruce

I won't say which one it is, but it's not a good one. And I was in a job for two years and I got the statement when I left that job and I'm like, what? I've made no money because I was in all cash.

905.034 - 905.454 Owen

Oh, wow.

Chapter 6: What role does contribution play in building a robust Superannuation?

963.022 - 976.557 Kate

Correct. I mean, the teachers aren't talking about super, even though they're hopefully getting paid some. So, yeah, what do you think is affecting us as we grow up and what's stopping us from thinking about super into its way too late often?

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976.621 - 998.729 Bronwyn Bruce

Yeah, so I can talk about this isn't all related to super but I can talk about like the economic socialization that happens when you're a child and how that affects you and the research that I'm doing. So I've now analyzed the first set of 20 interviews that I've done and this is like real fresh off the press stuff. Exclusive.

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998.749 - 1000.071 Owen

Unbreaking. Here we go. I'm not kidding.

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1000.131 - 1022.018 Bronwyn Bruce

I spent the last two weeks coding my data like it was horrible. So in heteronormative families, sorry, mum and dad, it seems that the dad is responsible for the big picture type stuff, the investing, if they do invest, whereas the mum tends to be the day-to-day, you know, budgeting, doing the shopping.

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1022.038 - 1022.959 Owen

Finance controller, yeah.

1023.019 - 1046.502 Bronwyn Bruce

Yeah. So if girls and young girls, they look to their mothers. So that's research that's not mine. So the same-sex parent is the most influential. So if young girls are looking to their mothers and seeing them doing this day-to-day budgeting, how do they then go ahead later and do a big picture, you know, for themselves?

1046.522 - 1048.444 Kate

Yeah, because they're not seeing it demonstrated.

1048.576 - 1071.732 Bronwyn Bruce

Yeah. So that's one thing. As you mentioned about school, hilariously, or maybe not hilariously, no one learned about money at school. No, no. Like absolutely no one can remember and learn anything about money at school. I mean, they did math classes and maybe the odd one did a commerce class, but they don't remember. And if they did have some lesson, they don't remember any of it. So...

1071.712 - 1079.404 Owen

But you can calculate the circumference of a circle, which is really important later in life. Everyone wants to know, pi r squared, just in case you're wondering.

Chapter 7: How can investment choices impact long-term Super growth?

1146.348 - 1152.9 Bronwyn Bruce

That's someone like cheers you on or tells you about something that they've done. And you go, I can do that.

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1152.88 - 1158.175 Kate

Yeah, like, hey, I just checked in my super. I added an additional contribution. Why don't you do that too?

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1158.195 - 1166.6 Bronwyn Bruce

Correct. That is verbal persuasion. And then vicarious experience is when you see someone do something and you're like, oh, they did that.

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1167.001 - 1169.838 Kate

Yeah. They invested for the first time. Why can't I?

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1170.038 - 1187.916 Bronwyn Bruce

Yeah, exactly. And then on the flip side of that, I'm also getting a few examples of negative vicarious experiences. So that's where someone did something and it was terrible or it went horribly wrong in a financial sense and they're like, I never want to do that so I'll make sure I don't because I'm going to take these steps to stop it.

1188.176 - 1195.924 Kate

Yeah, like hearing one horror story from a friend using a financial advisor or something and that puts you off the whole industry and using it full stop.

1196.304 - 1196.404

Yeah.

1196.384 - 1204.154 Bronwyn Bruce

Yeah, but then on the flip of that, you then maybe talk to someone else who you trust that can give you advice or something like that. Yeah.

1204.875 - 1222.999 Owen

Yeah, so that's… Can I stop you? Is it more common to have that kind of negative vicarious… Than a positive? Yeah. So, like, you know that there's a saying, an unhappy customer tells ten people, a happy customer tells three? I feel like, at least in finance, you hear a lot of negativity here.

Chapter 8: What are the practical steps to start a conversation about Super with friends and family?

1315.031 - 1332.329 Kate

I mean, I probably say that in my own life. The people that I trust and I think are somewhat successful in their life are probably a lot more likely to take on what they say when it comes to finance and business than someone else that might not have experienced this or had a string of bad luck. Yeah. I don't know if that's exactly the right way to approach it.

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1332.589 - 1339.523 Bronwyn Bruce

No, no, that's the way. And then the one who has a string of bad luck, that's a negative experience. You don't want to do that. You want to do the opposite.

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1339.703 - 1346.035 Kate

Yeah. It's a lot from like, I don't want to be like them. So I'm going to take all these steps to not go in the same direction.

0

1346.268 - 1367.01 Bronwyn Bruce

Yeah. So trustworthiness, it's a huge key when it comes to superannuation, especially around the government's control of it and the way it's legislated. It came up again and again. They have this lack of trust in the system. So they don't bother engaging with it. They're like, well, that money is locked away for how long? And even at that point, will I even get it?

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1367.952 - 1389.754 Kate

I heard one young person that I know tell me the other day, oh, super's just a scam. Source probability. Yeah, he's written off the whole thing so he doesn't want to make any changes. He wants to keep it in cash just because he thinks the whole thing's. And so, yeah, it's interesting. And how many people does he go and convince of his opinions there?

1390.254 - 1394.839 Bronwyn Bruce

Yeah, that's frightening. Or he's the negative vicarious and everyone's like, I don't want to be like that guy.

1394.859 - 1395.64 Owen

Yeah, that guy's crazy.

1395.8 - 1395.9

Yeah.

1397.618 - 1408.033 Owen

Okay, so that's what you've kind of realized that those are kind of the things that people are feeding in. How do you get people to engage?

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