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Self managing funds on the rise in Australia; Gender savings imbalance; Now hear this banks; What are you waiting for?; Reward for good health

Personal Finance
Self managing funds on the rise in Australia; Gender savings imbalance; Now hear this banks; What are you waiting for?; Reward for good health

By Amanda Morrall (email)

1) The rise of self managed funds

Across the pond, where Australians have more than A$1.3 trillion in combined superannuations savings, investors are striking out on their own. About 30% of those savings are now parked in self-managed superannuation funds and the rate continues to grow.

Vanguard Australia, in its latest newsletter reports on the trend and asks why 844,000 plus Australians have taken to running their own super fund. Amid mediocre market returns, not many want to lose more to fees these days. Who can blame them?

2) The gender savings imbalance

On the super savings front, women, the elderly and the unemployed continue to lag behind men. Another group at risk of having no savings to fall back on in old age are the self-employed. Presumably they're banking on their businesses to make them rich.

Ross Clare, writing for the Association of Superannuation Funds of Australia (ASFA)'s magazine Superfunds, discusses the savings imbalance and how to fill the gap.

3) Now hear this banks

Ernst & Young, in its latest survey of more than 28,500 banking customers in 35 countries, discovered a growing intolerance for banks who are either unwilling or unable to tailor to meet their wants and  needs. Customers are finally voting with their feet. Banks in turn are finally starting to take note.

To remain competitive, Ernst & Young, proposes banks do more of the following:

  • Give customers the opportunity to choose by making promises and service offers more transparent.
  • Rebalance fee structures to achieve the clarity and sustainability required by regulators and investors.
  • Help customers shape their own banking experiences by improving how they provide information and advice, recruiting online affinity groups and by developing flexible loyalty programs.
  • Develop models around customer needs by reprioritizing spending, including increasing the use of low-cost digital models and using more innovative technology.

For more, check out our banking and finance editor Gareth Vaughan's report on the survey here.

4)  What are you waiting for?

Waiting for that big break that's going to vault you to super success and wealth? You could be waiting, and waiting and waiting. Sure, good fortune will occasionally fall into your lap but banking on that possibility is foolhardy. This blog by takes a closer look at the wrong recipe for success which he defines as follows.

Work Hard + Wait for Permission = Success.”

Here’s what you have to understand about success…about fulfilling your potential. No one can do it for you. Not your parents, not your spouse, not even God. ... it’s up to you. Do you give yourself permission to succeed? I’m not talking yachts and Ferraris…I’m talking purpose and destiny. As Zig Ziglar said, you were “designed for accomplishment, engineered for success, and endowed with the seeds of greatness.”

Believe me when I say this – the only limits to your success are the ones you place in front of you. Give yourself permission. Remove the limitations. The world needs what you have.

5) Rewards for good health

According to a C.D. Howe report out of Canada, annual health-care costs for a person over 65 are three to four times greater than for someone under 44. For a person over 85, they’re 12 times greater. Given the demographic shift ahead, Governments and insurers are in a sweat. It seems all but certain that taxes and insurance premiums will go through the roof to compensate for the gloomy health spiral ahead.

Obviously no one wants to get ill or can predict when ill health may befall them however for those who work hard to stay healthy, or at least go out of their way not to engage in behaviours known to provoke poor health, the financial burden seems a bit unfair.

Should the healthy be rewarded? If so how?

Southern Cross addresses the conundrum in their latest newsletter and explains their reasons for vetoing a plan to discount tenured healthy customers. Encouragingly, it looks like an extension of their two-year discounting programme for low claimers could be in the works.  More here in its newsletter.

To read other Take Fives by Amanda Morrall click here. You can also follow Amanda on Twitter @amandamorrall

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