Retirement

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GUEST OBSERVER
The federal government is split on whether first home buyers in Australia should be allowed to use part of their superannuation for home deposits.
But what the more strident critics miss is that Australia’s superannuation system already channels a significant proportion of retirement savings into housing.
It does this not via the traditional route of people buying a house outright, but rather through an indirect channel, by transforming the household’s compulsorily acquired superannuation equity into mortgages from commercial banks and other financial intermediaries.
Statistics from the ABS (December 2016) show that for every A$1 of assets managed by the superannuation sector, approximately 27 cents is directly financing Australia’s banking sector. This is via superannuation holdings of bank deposits (14c in the dollar), bank equity (7c in the dollar), and other bank liabilities (6c in the dollar).
What do banks do with this 27c? The ABS reports that 38 percent of bank financial assets are long-term loans to households. We have cross-inspected this data with figures from the Australian Prudential and Regulation Authority (APRA) and found that nearly all of these loans are mortgages.
This suggests that at least 10c of every A$1 of superannuation assets is indirectly financing house purchases via commercial bank debt.
But this also excludes other indirect financing of banks by superannuation. For example, the portfolios of non-money market mutual funds and other private non-financial corporations are also heavily weighted towards funding banks (24 percent and 36 percent of their assets, respectively), and superannuation funds allocate 6 percent and 24 percent of their funds to these agents respectively. This potentially adds a further 4c in every A$1 of superannuation assets that ultimately results in debt financing of housing.
Why using super for housing might be good idea
One of the merits of allowing households to use their superannuation to supplement their housing deposits would be to reduce unnecessary and expensive financial middlemen. Under the present system, the money from superannuation that finds its way into housing finance does so by passing through chains of two or more intermediaries. This means that it incurs management expenses at each step.
The first link in the chain is the superannuation sector (with an average expense ratio of 0.7 percent). Next is one or more financial intermediaries, like banks. A plausible estimate of the banking sector’s expense ratio, by our calculations, is 1 percent to 2.3 percent of bank assets.
Total expenses through the intermediation chain could therefore be as high as 1.7 percent to 3 percent. These expenses might be lower under a housing equity super access scheme.
Another potential benefit relates to the accumulation of debt and its consequences for financial stability.
Most of the money people put away into superannuation, because its compulsory, would have otherwise been used for other types of saving. If you look at the assets in a household’s balance sheet, it is clear that housing equity (representing 65 percent of non-superannuation assets) is the household’s preferred savings vehicle.
It is possible that growth in compulsory superannuation has contributed to growth in household debt in two ways. First, by frustrating people’s ability to finance home ownership through their deposit. Second, by increasing the supply of mortgage finance, as superannuation savings are recycled through the financial system, and converted to mortgages by the banks.
The risks with the plan
One concern about letting people divert money into buying a house is that their income in retirement could suffer as a result. To mitigate the risk of this happening, any policy on this would need to record and track the values of super funds’ home equity stakes (just as super funds presently track values for the traditional assets they hold).
But retirement income is determined by total net assets, not superannuation assets alone. In this context, home ownership provides retirees an important stream of stable tax-free, inflation-protected, income. This is recognised by the Association of Superannuation Funds of Australia benchmarks for “modest” and “comfortable” retirement income.
These assume that retirees own their home outright. So the decline in home ownership is a significant threat to the adequacy of Australia’s retirement income system.
A second risk is that the policy could further raise house prices, reducing affordability and exposing retirement savings to a house price collapse. In the present house price environment, this is a real risk, which would need to be monitored. But the policy’s two main merits (reducing intermediation costs and improving financial stability by reducing gross debt) are long-run benefits that will continue to hold beyond our current point in the house price cycle.
APRA also already monitors risks associated with housing credit growth, and has the tools, and the willingness to use them, should the policy promote undesired house price growth.
There are reasons to expect that a policy allowing first home buyers access to super will not lead to net growth in housing finance. Superannuation funds are already required by APRA to understand their underlying asset exposure risks. So super funds might try to maintain their total exposure to property risk under this policy, for example by reducing their exposure to the banks. 
James Giesecke<a href="https://theconversation.com/profiles/james-giesecke-9853"> </a>is professor, Centre of Policy Studies and the Impact Project, Victoria University and can be contacted <a href="https://theconversation.com/profiles/james-giesecke-9853" target="_blank">here</a>.
Jason Nassios is research fellow, Centre of Policy Studies, Victoria University and can be contacted <a href="https://theconversation.com/profiles/jason-nassios-318488" target="_blank">here</a>.
Both are authors for The Conversation.
 
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jchancellor-FAypfDUnLy

Here’s how superannuation is already financing homes

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GUEST OBSERVER
New statistics showing one third of older Australians in low income households are ‘asset rich’ and ‘income poor’ demonstrate the need for new policies that will help them unlock their home equity in retirement. 
Data from the Australian Bureau of Statistics concludes one third of older low income households have less than $5000 in cash and other liquid assets, with nearly their entire wealth locked up in the family home. 
A typical older Australian will have $600,000 in property assets but will be living day-to day on a fixed income. 
We need to put in place the right policies that help older Australians downsize. All too often, a pensioner considers downsizing only to reject it because it would mean a hit on their pension. 
Many older Australians have a desire to move to more age appropriate accommodation, like a retirement village apartment or villa, but will be hit with a reduction in their income despite owning exactly the same amount of assets if they make the move. 
The reasons for downsizing are often health related – wanting homes without steps, or big backyards to maintain, and lower rates and utility costs. 
It makes little sense, both from an economic and a health and wellbeing perspective, to trap older people in large and often unsuitable family homes, with little money available to spend. 
The Property Council is proposing an adjustment be made to the means test, to exempt some proceeds from the sale of the family home by full-rate age pensioners aged over 75. The cost to the Budget is minimal. 
This type of targeted reform that removes the current disincentive to downsize will benefit income poor pensioners, as well as make the pension system fairer and more sustainable.
Mary Wood is executive director, Retirement, Property Council of Australia and can be contacted <a href="https://www.propertycouncil.com.au" target="_blank">here</a>.
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ABS figures prove need for downsizing help for seniors: PCA's Mary Wood

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ASIC has warned Australian investors considering establishing their own self-managed superannuation fund (SMSF) to be aware of the potential risks and downsides of such a strategy.
They said many Australians set up SMSFs that are inappropriate for their circumstances.
ASIC has identified eight "red flag" situations which, together or in part, would make it extremely unlikely for an investor to gain any advantage from using SMSFs to create and safeguard their intended retirement lifestyle.
Australian Tax Office figures reveal that as at 30 June 2019, there were 599,678 SMSFs in Australia holding nearly $748 billion in assets, making total assets held in SMSFs larger than those in either industry ($719 billion) or retail ($626 billion) funds.
ASIC Commissioner Danielle Press said, "ASIC believes that consumers are all too well aware of the potential benefits that might stem from using a SMSF, but are not equally alive to the considerable risks and responsibilities that come with the deal.
"SMSFs may be an attractive option for investors wanting more control over their superannuation investment strategy, but it requires real skill, care and diligence to manage your own superannuation. SMSFs are not for everyone simply because not everyone can meet the significant time, costs, risks and obligations associated with establishing and running one."
ASIC previously tracked and analysed member experiences in using an SMSF, and whether advice providers were complying with the law when providing personal advice about setting up an SMSF (refer Background). The research identified the "red flag" indicators that suggested when an SMSF may not be appropriate for an investor.
"Our research found that SMSFs are not suitable for members with a low fund balance, particularly where they have limited ability to make future contributions. This is important because consumers starting off with a low balance need to be aware that they may not be in a better financial position in the future by holding an SMSF compared with investing in an APRA-regulated fund," Ms Press said.
ASIC"s research also found that SMSFs are not an appropriate investment option for people who want a simple superannuation solution, particularly if they have a low level of financial literacy or limited time to manage their own financial affairs. On average, SMSF trustees spend more than 100 hours a year managing their SMSF.
"Where people have limited investment decision-making experience or prefer to delegate decision-making to someone else, they should carefully consider if an SMSF is right for them. As the trustees of their own fund, SMSF investors must remember that they are responsible for their fund"s compliance with the law, even if they pay a professional to help," Ms Press said.
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j.ballantyne1990-6AQqhLzZaK

ASIC identify the 8 red flags of SMSF's

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GUEST OBSERVATION
The Productivity Commission’s <a href="https://www.pc.gov.au/inquiries/current/superannuation/assessment/draft" target="_blank">latest report on superannuation</a> asks whether the current system is working for members – and answers <a href="https://theconversation.com/young-people-not-employers-should-choose-super-fund-productivity-commission-97329" target="_blank">firmly in the negative</a>.
The <a href="https://www.urban.com.au/property-observer" target="_blank">report identifies</a> four factors that can chip away at super fund members’ retirement benefits:
<ul>
<li>fees</li>
<li>rate of return</li>
<li>insurance</li>
<li>holding <a href="https://www.urban.com.au/property-observer" target="_blank">multiple accounts</a>
</li>
</ul>
What is also clear from the evidence laid out in the report that the not-for-profit sector, including industry super funds, generally outperforms the retail sector. Generally they offer lower fees and higher returns, although there are some industry funds that rank among the lowest-performing.
Despite recent reforms such as the 2013 launch of MySuper, the superannuation system is still beset with the same problems of rising fees and patchy performance. And there is still no substitute for just hopping on the internet and proactively checking that your super is in the best possible hands.
The situation is made complex by the highly segmented nature of Australia’s superannuation system. Besides the public sector funds, the most significant sectors are the retail sector and the not-for-profit funds, including industry funds (see figure 1.5 <a href="https://www.urban.com.au/property-observer" target="_blank">here</a>). These sectors compete for as large a slice as possible of the overall pool.
Self-managed superannuation funds are also a rapidly growing sector of the market, however the regulatory framework applied to these funds has some significant differences to the rest of the market.
Tracking your super
Most employees have the right to choose their superannuation fund (<a href="http://kmo.ministers.treasury.gov.au/speech/008-2018/" target="_blank">although around one million don’t</a>), and if they don’t nominate a fund, employers will pay contributions into a default fund.
As the new report points out (see figure 1.2 <a href="https://www.urban.com.au/property-observer" target="_blank">here</a>), up to 40% of superannuation members hold multiple super accounts. In some cases this may be a deliberate choice – someone with a self-managed super fund may might, for example, choose to have their employer contributions paid into a conventional fund. But often multiple funds are a consequence of employees being enrolled into a new default fund instead of paying contributions into an existing fund.
A range of <a href="https://www.ato.gov.au/Individuals/Super/Keeping-track-of-your-super/" target="_blank">tools</a> is now available to help people consolidate their super, so as not to <a href="https://www.moneysmart.gov.au/superannuation-and-retirement/keeping-track-and-lost-super/consolidating-super-funds" target="_blank">lose any of their savings</a>. In the 2018 federal budget the government <a href="https://treasury.gov.au/consultation/c2018-t286292/" target="_blank">announced</a> that it would reduce the paperwork involved in this process by allowing the Australian Taxation Office to consolidate inactive super accounts with balances less than A$6,000.
MySuper
The primary aim of <a href="https://www.moneysmart.gov.au/superannuation-and-retirement/how-super-works/choosing-a-super-fund/mysuper" target="_blank">MySuper</a>, introduced in 2013, was to provide a <a href="https://static.treasury.gov.au/uploads/sites/1/2017/06/R2009-001_Final_Report_Part_2_Chapter_1.pdf" target="_blank">simple default product</a> that meets the needs of members who are not engaged with their superannuation. They have no entry fees, offer simpler insurance and services, and lower administration fees that are charged on a cost-recovery basis.
But although the effects of MySuper are generally positive, the 2013 reforms may also have contributed to the erosion of funds identified by the new review.
This report confirms (see chapter 3, p.127 <a href="https://www.urban.com.au/property-observer" target="_blank">here</a>) that super fund fees in Australia are among the highest in the OECD, and the upward pressure on fees continues. Just this month, the Commonwealth Bank announced that it would <a href="https://www.smh.com.au/money/super-and-retirement/cba-s-superannuation-sting-is-out-and-out-gouge-says-minister-20180523-p4zh23" target="_blank">pass the costs of regulation onto some superannuation products</a>.
One of the consequences of introducing the fee charging limitations for MySuper accounts was that the previous member protection standards that limited fees on low-balance accounts was <a href="https://www.legislation.gov.au/Details/F2013C00067" target="_blank">repealed</a>. In the 2018 federal budget the government <a href="https://treasury.gov.au/consultation/c2018-t286292/" target="_blank">announced</a> that fees would be capped in respect of certain low balance accounts.
MySuper products must provide also life insurance on an opt-out basis. Insurance in superannuation has also been under scrutiny, with inappropriate or junk policies being included in superannuation. The government has announced proposals to change this to an <a href="https://treasury.gov.au/consultation/c2018-t286292/" target="_blank">opt-in</a> system.
This report adds to the evidence that overall the current structure of not-for-profit funds is serving members well. Although it supports proposals to require the trustees of industry funds to increase the number of independent directors, the Productivity Commission highlights the need for a stronger focus on trustee skills and addressing conflicts of interest.
Take responsibility for your super
It is concerning that many of the problems identified by the new report are the same ones that arose in the 2014 Financial System Inquiry, the 2015 Cooper Review, and in the evidence to the Financial Services Royal Commission.
Most of these issues raised have been part of the discussion for the past decade. The fact that they are still on the table shows a level of inertia in the system, and a reluctance by the industry to address its problems.
So how can we, as individuals, protect our retirement nest egg? The key is to engage with the superannuation system, and not just as we approach retirement.
Compare your super fund’s fees and returns with those of the best performing funds, and then choose accordingly. Reduce your fees and insurance premiums by consolidating your accounts, and make sure that any insurance in the fund meets your needs.
<img src="https://counter.theconversation.com/content/97318/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">The difference at retirement is worth it – up to A$407,000 for a 21-year-old by the time they finish their career.
Helen Hodgson, Associate Professor, Curtin Law School and Curtin Business School, Curtin University
This article was originally published on <a href="http://theconversation.com">The Conversation</a>. Read the <a href="https://theconversation.com/superannuation-is-still-mired-in-the-same-old-issues-and-no-one-is-going-to-fix-your-nest-egg-but-you-97318">original article</a>.
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Superannuation is still mired in the same old issues, and no one is going to fix your nest egg but you

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GUEST OBSERVATION
Australia is ranked in the top third of countries in almost all indices measuring the best countries to retire, according to our analysis of nine separate ageing and retirement indices.
The problem is, experts contriving such indices can’t agree about which ingredients should be included and which are most important.
The flaw of averages
While composite ageing indices provide us with what appear as simple comparisons, the underlying methodologies are complex, prone to judgement, and can be tweaked to obtain certain results.
Using indicators that aggregate outcomes for the older population within a country also ignores differences between people within this population. Sub-indices by gender and more granular age-groups do exist, but one improvement could include an inequality adjustment based on outcomes by socioeconomic status or income.
What about just asking people about their life? Studies that compare differences in people’s own evaluations of life across countries show these are substantially explained by social and economic differences across countries. And when comparing individuals in high-income countries such as Australia and Britain, good physical and mental health appear most correlated with life satisfaction, while in middle-income countries like Indonesia, income is more important.
But that doesn’t differentiate by age. When the OECD asked older people across rich countries what mattered to them, they said that “health” and “environment” were most important while “civic engagement”, “community” and “income” domains were less so. By contrast, younger groups attributed less weight to “environment” and more to “income”.
Such indices usually involve scoring a country in several categories and combining these into a composite score and ranking. Done well, these can reveal how life in one location is better than another and in which categories it is lagging.
So what do existing indices suggest is important for older people’s well-being? And which countries come out on top?
Ingredients for a good old age
The ingredients used in an overall index differ, ranging from the employment rates of older people in each country, to their political participation, income, levels of exercise, and life expectancy.
These indicators and weights are often chosen subjectively by experts constructing each index. Some comparisons focus on current standards of living and comprise social, environmental, health, and economic indicators. These are probably more immediately relevant to people.
By contrast, indices that aim to measure the likely future for older people mostly comprise financial indicators and those that relate to retirement income system design, demography, and economic conditions. These are probably of greater concern for those thinking ahead about the impacts of population ageing.
Where to retire?
Despite the flaws with such comparisons, few people can help themselves. So how does your country rank?
European countries – particularly Nordic ones – are consistently highly ranked across ageing indices (see figure below). Such results reflect their high health outcomes, high incomes, generous social welfare, and comparatively well-designed retirement income systems. These are also countries that top the subjective happiness rankings.
Lower and middle-income countries receive lower rankings from the current well-being indices in which they feature. India and China, where there is low public provision for retirement, occupy high rankings among indices that emphasise fiscal sustainability over the quality of life of older people.
Australia is ranked in the top third of countries in almost all indices. It ranks particularly highly in the Melbourne Mercer Global Pension Index, largely due to the design of its retirement income system.
<img src="https://counter.theconversation.com/content/91573/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">For what it’s worth, one could take an index of these indices to summarise. Such an index, call it the CEPAR meta-index of ageing, indeed shows Nordic countries taking the top three places, followed by Australia and the US, with the UK coming somewhere in the middle of 25 countries – apparently well ahead of places like France and Italy. Something to ponder when contemplating the good life in old age.
Rafal Chomik, Senior Research Fellow, ARC Centre of Excellence in Population Ageing Research (CEPAR), UNSW
David Rodgers, PhD Student in Economics, UNSW
This article was originally published on <a href="http://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/australia-is-one-of-the-worlds-best-places-to-retire-or-is-it-91573" target="_blank">original article</a>.
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Is Australia really one of the world's best places to retire? 

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GUEST OBSERVATION
The New South Wales government has introduced a bill to reform the Residential Tenancies Act. This act sets out the rights and responsibilities of landlords and tenants in private rental accommodation in NSW.
The bill’s proposed limit on rent increases to one in every 12 months is essential, as are the proposed minimum standards for rental accommodation. However, my ongoing research with single older women renting in Sydney points to an urgent need for a cap on the value of rent increases and for an end to “no grounds” eviction. Victoria adopted these measures earlier this month.
Reform is essential. Growing numbers of Australians rent their housing and increasing proportions are expected to rent long-term. This makes it essential that private rental housing meets the need that every person has for a secure and affordable home.
It’s getting harder for older renters
It is getting harder for older renters to find adequate, appropriate and secure housing. Older women – the focus of my work – are at particular risk. This is due to longer life expectancy, lower incomes across the life course, and less access to benefits like superannuation. Women also experience a greater loss of income and housing standard than men do after relationship breakdown, and are at greater risk of domestic violence.
Their stories point to the role of flaws in the Residential Tenancies Act in compounding housing insecurity.
Rising rents add to hardship
Rising rents were a problem for nearly all women I spoke with. They depleted women’s budgets, leaving little money to buy food or pay for utilities. Many relied on local charities for food and help to pay energy bills.
One woman described how she would add protein to her meal by buying a single chicken breast, slicing it thinly and freezing each piece separately to be defrosted over the next week or so. Another relied on vegetables the local greengrocer bundled and discounted before throwing out.
In winter, when heating bills mounted, she relied on a local church with a weekly food pantry. This food, donated by local supermarkets and community members, was frequently past its “best before” date. As a low-paid community worker living in an area with a significant number of disadvantaged families, she collected food alongside her clients.
Two women coped by moving into their cars. They subsisted on tins of food that they could hide in the car. At night they kept themselves safe by parking in familiar locations.
Living with substandard conditions
Rent rises also made it difficult to find appropriate housing. Affordable housing was often substandard. Many had difficulties getting landlords to agree to repairs.
One woman described how her rented unit began leaking. The leak was severe and lasted for nearly two years. In this time she lived with increasing mould and lost access to nearly 40% of her home. She sought repairs from the landlord, but only cautiously, because she was afraid of eviction.
When the leak was eventually fixed her rent went up 20%. That left her with only A$30 a week after rent, essential bills and transport. She couldn’t afford food and relied on local charities until she found cheaper housing in a distant, transport-poor suburb.
Another described a similar leak: "When it rained the water would come straight down into the doorway. And that was the only way you could get into the house […] it was in the house and even in the bedroom."
Despite this the owner increased the rent. The real estate agent notified her of the increase by letter, but distanced herself from repair requests when confronted in person stating: “Well, we can’t do anything [to fix the property] until the owner says we can.”
The agent helped the landlord to make more money from their investment, while illegally blocking this woman’s entitlements to secure and usable property. The impact on her capacity to take care of herself was significant. Living with the leak risked her health. However, challenging the landlord – pushing them to repair the leak – risked eviction.
Rethink the value of rental housing
These stories show the need to rethink how we value and regulate private rental housing. It is time that we recognise the fundamental role that housing plays in our ability to meet basic needs – for shelter, warmth, food and above all a sense of security and home.
When housing is too expensive, unsafe or inadequate, our capacity to meet our care needs deteriorates and our health suffers. For women in my research their capacity to age in place – and even to remain housed – was challenged.
This is not good for tenants or landlords. Although popular wisdom suggests tenants and landlords have different interests, they in fact have very similar concerns: both benefit from secure tenancies and rental properties that are well maintained and cared for.
The proposed amendments to the act are a good starting point.
Restrictions on the number of rent increases in a year are essential. However, the women in my research struggle not just because of the number of rent increases they face. They find themselves in precarious situations because of the size of the increases, which in some cases left them unable to afford necessities like food.
Minimum housing standards are also essential. The women in my research cannot begin to maintain their health or age well at home if their home leaks or does not meet other basic standards.
But perhaps more pressing is the need to end no grounds evictions. For women in my research, repair requests carried the risk of eviction. This left many afraid to ask for repairs. They lived in unhealthy and unsafe housing rather than risk eviction in a market with few affordable options.
Landlords in many areas can readily replace tenants. And an evicted older woman can easily end up living in her car.
Ending no grounds evictions will have no impact on landlords who do the right thing. They will still be able to terminate a lease on reasonable grounds such as renovating or moving into the property. It would, however, help put an end to retaliatory evictions, which in turn would support efforts to maintain minimum housing standards.
<hr>
This article is based on research findings presented in a talk by the author at an event, Fair for Everybody: Reforming Renting in NSW, hosted at Parliament House on Wednesday.<img src="https://counter.theconversation.com/content/103842/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Emma Power, Senior Research Fellow, Geography and Urban Studies, Western Sydney University
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/life-as-an-older-renter-and-what-it-tells-us-about-the-urgent-need-for-tenancy-reform-103842" target="_blank">original article</a>.
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Life as an older renter, and what it tells us about the urgent need for tenancy reform

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GUEST OBSERVATION
Australians have A$2.6 trillion in superannuation assets. We conducted a study of Australian women who influence or make decisions about how these assets are invested. Research shows gender-diverse investment teams lead to better investment returns. Yet women report being subject to sexist and unequal treatment in their industry.
While women are now the majority of finance graduates at some Australian universities, they remain a minority at all levels of investment management. They comprise 17% of Australian investment managers. On average they experience a 33% gender pay gap. This is almost 10 percentage points bigger than the gap across all industries.
The gender pay gap is particularly pronounced because discretionary bonuses make up a substantial portion of pay packets in investment management. Women are less likely to be in roles that are paid bonuses. The also report being paid lower bonuses than male equivalents.
Our survey and interview data from 127 women show investment management remains a “boys’ club”. Our findings mirror those of studies of women in Australian finance conducted since 1991. Little has changed over 30 years.
The women in our study were ambitious and passionate about working in investment management. They talked about the strong sense of purpose their jobs provided. They wanted more women making career decisions to be aware of the financial and intellectual rewards.
Most study participants were relatively senior, and most agreed they were treated with respect and had sufficient flexibility over work hours. But only half agreed their workplace treated men and women equally. A significant minority had experienced sexual harassment, offensive remarks or behaviours, and exclusion from important work-related events.
Working mothers have it hardest
Lack of accommodation of working mothers was the key problem identified.
More than half agreed working flexibly or part-time compromised career opportunities. Women described only limited access to flexibility and maternity leave, and stalled careers as a result. Women who took extended leave or “downshifted” were paid less than men in their cohort. This led to a widening pay gap over the course of their careers.
Other problems were identified:
<ul>
<li>
an “ingrained” culture of sexism and gender discrimination; this included stereotyped views of women being best suited to administrative roles, and that their primary role was that of family carer
</li>
<li>
unconscious and conscious biases screening women out of recruitment processes and preventing their advancement
</li>
<li>
disillusionment that men across the industry were only paying “lip service” to gender equality
</li>
<li>
an absence of support, sponsorship and mentoring from direct managers throughout their careers.
</li>
</ul>
Diversity promotes accountability
Finance-sector organisations are under pressure to improve their accountability and performance following the banking royal commission. Having more diverse decision-making is key to this. Cognitively diverse teams are less likely to engage in group think or risky behaviours.
It’s important the leaders of investment management organisations show genuine commitment to improving diversity. It’s equally important this commitment is enacted by managers at all levels.
At the team level, managers should provide support and equal opportunities for women to “stretch” themselves and build their potential for promotion. We found women given the same career-advancing assignments as male colleagues advanced to senior levels and recruited more women at levels below.
One catalyst for change might be to link managers’ pay, bonuses or promotion prospects to achieving key performance indicators for supportive and equitable management practices.
At an industry level, superannuation funds such as HESTA are measuring gender diversity in the firms that manage their assets.
The research points to a need for organisations to “de-bias” all people management processes to ensure gender-equal outcomes in recruitment, allocation of assignments, development opportunities, promotions and remuneration.
To accommodate working parents, organisations should redesign jobs to allow for reduced workloads and career advancement. They need to develop strategies that minimise the impact of maternity leave on career trajectories. They should also encourage men to work flexibly and take extended parental leave, so this becomes a cultural norm.<img src="https://counter.theconversation.com/content/103319/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Sarah Oxenbridge, Research Fellow, University of Sydney Business School, University of Sydney
Rae Cooper, Associate Dean, University of Sydney Business School, co-Director Women, Work and Leadership Research Group, University of Sydney, University of Sydney
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/for-the-sake-of-our-retirement-savings-its-time-to-reform-the-investment-management-boys-club-103319" target="_blank">original article</a>.
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Developments

New apartments

New townhouses

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