News in Brief

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  • Women 92 Days from Financial Ruin;
  • Sunsuper and FPA Enter Advice Partnership;
  • Industry Results Show Signs of Improvement;
  • FSC/Deloitte Future Leaders Award Winner

Women 92 Days from Financial Ruin

A new survey by RaboDirect has found that women are worse off than men when it comes to the size of their savings buffer.

Women were found to have a 92 day buffer of savings if they were to lose their job tomorrow, compared to a timeframe of 120 days for men. Overall, the survey revealed that Australians’ savings would only cover them for 3.6 months, down from 4.7 months last year.

The survey also found that:

  • Nearly 20% of Australians have no savings so would have nothing to live off if they lost their jobs tomorrow
  • Baby Boomers had the biggest savings buffer, with an average of 5.2 months
  • Gen Y had the smallest savings buffer, with an average of 2.7 months

RaboDirect’s Group Executive, Greg McAweeney, said Australians can’t afford to be complacent about their savings. “Our research shows that on average, Aussies have a savings buffer that would last approximately three months. But against that, women are far worse off with just 13 weeks on average. That might not sound scary but the truth of the matter is it’s just not enough, especially when you consider all your expenses and the rising cost of living,” Mr McAweeney said.

Sunsuper and FPA Enter Advice Partnership

Sunsuper and the Financial Planning Association have announced a partnership through which the fund’s members will be connected with FPA Professional Practices.

Sunsuper said the partnership would see the fund develop direct relationships with a number of FPA Professional Practices, who shared the Sunsuper philosophy of always acting in members’ best interests, and would complement the in-house financial advice service already offered by the fund.

“We have our own in-house team of advisers based in Brisbane, Sydney and regional Queensland, but as part of the new arrangement, we will be looking to work with FPA Certified Financial Planners over a much wider geographic base who will advise and act in the best interests of our members,” said Sunsuper Executive General Manager, Growth and Advice, Michael Mulholland.

The FPA said it will undertake an ‘Expression of Interest’ process to all FPA Professional Practices, to support Sunsuper in connecting its members with quality financial advice. The first referrals are expected to start from January.

Industry Results Show Signs of Improvement

The Australian insurance industry is starting to show signs of improved profitability, achieving a 1.4% increase year on year for the 12 months ending 30 September 2014.

According to the latest Australian Prudential Regulation Authority, net profit after tax for the period was $2.3 billion, up from the previous year’s result of $2.2 billion.

Despite the fact that revenue was down year on year ($39.6 billion compared with $46.6 billion in 2013), the industry appears to have reigned in expenses. Total expenses for the period were $35.7 billion, compared with $42.2 billion in 2013. The quarterly results were also positive, with total expenses of $8.5 billion for the 2014 quarter comparing favourably with the June 2014 quarter ($9.8 billion) and September 2013 quarter ($14.1 billion).

Individual risk products contributed $202 million to the net profit result, and group risk products added $12 million.

FSC/Deloitte Future Leaders Award Winner

AMP Capital Portfolio Analyst, Stephen Flegg, has taken out this year’s Financial Services Council/Deloitte Future Leaders Award.

The Award, which is open to financial services professionals under the age of 30, requires entrants to submit a thought leadership paper on one of the key issues facing the industry. Mr Flegg’s paper focused on Australia’s longevity problem and how to address the gap between life expectancy and retirement savings.

This year’s runners up were Natalie Binns, Group Product Manager, Suncorp Life, and Martin Foo, a policy analyst at the Treasury.

“Initiatives such as our Financial Services Council/Deloitte Future Leaders Award encourage innovation and provide a platform for young professionals to showcase their ideas and expertise,” said FSC CEO, John Brogden.

“The thinking and innovation from our next generation of leaders, combined with the experience and wisdom of our senior executives and mentors, are essential for the future of financial services in Australia.”