Alva Devoy

One in three women don’t have enough money saved to allow them to make significant life decisions like changing jobs or changing relationship status, according to research by Fidelity International in Australia.

The study, The Financial Independence of Women^[1], found that many women feel trapped by their financial situation, and lack the confidence or knowledge to break out of their circumstances.

Alva Devoy, managing director of Fidelity International, said the financial vulnerability felt by many women has more significant consequences than simply needing to prioritise or compromise on expenditure.

“We are hearing that some women feel locked into toxic work cultures or personal relationships because they are constrained by their financial circumstances.  The goal for financial independence continues to remain out of reach for too many Australian women,” says Ms Devoy.

When asked to define financial independence, the most common answer given by women is having a personal income so you don’t have to rely on financial support from others. But fewer than one in two women (49 per cent) says they feel financially independent, compared with around three in five men (58 per cent).

According to the research, one in five adult women has trouble making ends meet, and can’t easily support themselves and their family. For men, the figure is half that, at one in 10.

Furthermore, women are twice as likely to say their personal income doesn’t cover everyday expenses and bills. One in seven women disagrees that their income covers their everyday expenses and bills. For men, it’s only one in 14.

Ms Devoy says this lack of financial control can have long-term significant effects.

“We are already seeing the potential impact of a lack of financial independence and confidence, with women over 55 now the fastest growing group to experience homelessness in Australia.

“Another recent Fidelity study of older Australians shows that women continue to feel less engaged with their finances, with only 10 per cent of pre-retiree women saying that they feel in control of their finances compared to 25 per cent of men.

“Not only does this leave them at risk in the future, but it also has a significant impact on their overall wellbeing, including both mental and physical health, today.”

The research found that more than half of pre-retiree women say that financial stress has, or is, impacting on their health.  A significant minority of men (two in five) are similarly impacted by financial stress.

“The positive news is that the majority of women say they want to make a change,” Ms Devoy says.

“Most women (seven in 10) are motivated to achieve their financial independence. Two in three women say that they would like to take more control of their financial future but they are not sure what to do from here.

“There is a significant opportunity for the finance and investment industry in Australia to step up and do more to support women in this goal. Around one in two women say that investment communication is complicated, and one in four describe it as intimidating.”

Ms Devoy says it is also important for the industry to recognise what it is that women are looking for from a financial planner, and how to meet that need.

“While two in three pre-retiree women want to work with a financial adviser, only one in 10 wants a professional to take care of everything for them.  Instead, a significant majority (almost three in five) want their adviser to support and guide them, but still want to be in control.

“As we know, people who receive financial advice tend to be more confident and positive about their financial situation, and our research has shown the same trend.  Of those women who are not yet retired, and who have a financial adviser, one in five says that they rarely or never worry about money, compared to one in seven unadvised women.

“And advised women have more confidence in their capabilities. Advised pre-retiree women are about five times more likely than unadvised women to rate their knowledge of financial matters as very good.

“This kind of confidence is key to taking control of your financial future and engaging with strategies and plans that provide a solid financial future,” Ms Devoy says.

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[1] The Pathway to Financial Independence study (‘Financial Independence study’) was conducted in the field in January 2022.  It was undertaken online and involved 2,017 (n = 2,017) adult Australians

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Mark Vrkic

Fidelity International has appointed Mark Vrkic as director, institutional business, based in Sydney.

In the role, Mr Vrkic will help manage institutional client and consultant relationships, and grow Fidelity’s institutional business as the firm looks to expand into areas such as fixed income, direct property, and private credit over the coming years.

He will report to Tim Connolly, head of Fidelity’s institutional business, who says: “Mark has extensive experience in fund manager research and multi-manager portfolio management and is a very well-regarded figure in the institutional industry. We’re delighted to have him on board and believe he will be a very strong addition to the team.”

With more than 20 years of experience, Mark joins Fidelity from Mercer where he has spent the last three and a half years as head of Australian equities research. Prior to this, Mark had roles in the external equities team at Aware Super, and as a PM managing global equities and alternatives portfolios at BT and Advance. Mark holds a Graduate Diploma in Applied Finance and Investment and a Bachelor of Commerce from the University of Western Sydney. Mark is also a member of the Australian Institute of Company Directors.

Mark’s appointment follows the recent announcement that director, institutional business, Katie Constance had made the decision to relocate with her young family back to the United Kingdom.  Ms Constance remains with Fidelity and will be transitioning to a role within the Sustainable Investing team based in London.

Managing Director, Alva Devoy commented: “We’re fortunate at Fidelity to have an extensive global network which enables our people to move internally and transfer to other countries and indeed teams. Thankfully this means we’re in the fortunate position to keep Katie in the family and we look forward to working with her in her new capacity within the Sustainable Team – something very dear to both our hearts.

“I’d also like to take the opportunity to welcome Mark to the team. Mark is a disciplined and motivated investment professional with demonstrated skill delivering a wide range of investment advice and portfolio solutions in a career spanning  more than 20 years. His experience and passion will be hugely beneficial as we embark on the next growth stage of our business.”

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Alva Devoy

The mental wellbeing of almost half of Australians has been negatively impacted by COVID-19, while almost one in three have seen their financial wellbeing suffer, new research from Fidelity International reveals.

Fidelity’s latest ‘Pulse Survey’ explored the impact of COVID-19 on people’s finances, as well as their overall wellbeing.  It found 28.6% believe their physical health has suffered as a result of the pandemic and one in five (20.9%) their relationships with family and friends, revealing the wide-reaching implications of the health crisis.

• Almost half (45.7%) of Australians say their worry about money has increased since the COVID-19 crisis began.  One in five (22.4%) say they worry daily and one in four (26.5%) weekly.
• Almost one in three (29.4%) of those currently employed are worried about job security, far more than the pre-pandemic level of less than one in five (18.0%).  This skyrockets to 45.4% among those in casual employment.
• Worryingly, more than half of people (55.4%) say they could only last three months or less if they were suddenly made unemployed, including 16.9% who would not be covered at all.

Alva Devoy, Managing Director, Australia at Fidelity International, comments: “The first half of 2020 will long live in all our memories. Firstly, as a devastating health crisis and secondly, because of the massive impact that efforts to contain the spread of the virus have had on the real economy, as well as people’s own finances. Earlier this year, our Value of Advice report identified clear links between people’s financial and overall wellbeing.  We wanted to see if the same held true in the face of the current crisis and that has certainly been the case.”

Taking action

On a positive note, the research found that Australians appear to be making sensible choices when it comes to their finances through this period.  When asked what actions they would take to mitigate the impact of COVID-19 on their personal finances, the top choice was reducing their discretionary spending such as eating out with 63.4% saying they would do this over the next month to six months.

Just over half (54.0%) said they would reduce spending on essential items like food and clothing during the next one to six months, over other actions such as selling shares, property or other assets.

However, worryingly, 26.1% of people say they plan to take the opportunity to access their superannuation early in the next 12 months. 

Value of Advice

The research also showed that advice has reduced people’s worries about their finances during this period; while over half (52.8%) of unadvised people said they worry about money daily or weekly, this falls to just over one in three (36.5%) for those who are currently advised.

Advice has also had a positive impact on people’s overall wellbeing; almost half (48.8%) of those not seeking advice say their mental health has suffered as a result of COVID-19, compared to one in three (33.6%) of those currently advised.

The impact of advice on people’s long-term goals is also positive, with 72.1% of those who are currently advised saying they feel ‘reasonably’ or ‘very’ prepared for retirement, compared to just 29.5% of those who are currently unadvised.

Alva Devoy continues: “The pandemic has changed the way many of us live and work. For the more fortunate, this might provide opportunities to save or spend in a more considered way. However, for many, it is causing significant worries from job security to the impact of market volatility on savings. 

“While we cannot predict how this current crisis will develop, there are steps individuals can take to mitigate the impact on their own finances, reduce their worries and improve their overall wellbeing.  Taking a long-term view will be key.”

Anthony Doyle, Cross Asset Specialist at Fidelity International, added: “The Australian economy faces some significant headwinds in the immediate future and our Pulse Check survey shows this is clearly contributing to people’s worries. With households likely to tighten their belts in a recessionary environment, the hope of a consumer-led recovery is greatly reduced.

“Given the outlook, it is important that savers understand the ramifications that the current low-interest rate world will have on the future prospects for their portfolios. Cash, government bond and high-quality investment grade corporate bond returns are unlikely to compensate long-term investors for the rising costs of inflation. Unfortunately, we now face an environment where the concept of risk-free return is an historic concept.

“Increasingly, Australian investors will be required to take more risk to achieve their investment goals, meaning higher yielding asset classes like Australian and global equities are likely to see growing inflows in the years to come. Additionally, we expect that in the current investing environment active investment management will become increasingly important to investors. Growth outcomes are likely to be volatile, meaning there will be clear winners and losers at a country, sector, and company level. The ability to generate alpha by identifying the long-term winners, and avoiding those companies that face a more challenging outlook, will be key.”

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Alva Devoy

Fidelity International has launched the Fidelity Sustainable Water & Waste Fund in Australia, focusing on sustainable investment opportunities within the water and waste management sectors.

The fund seeks to deliver strong risk adjusted returns across the cycle by investing globally in companies involved in the design, manufacture, or sale of products and services in connection with the water and waste management sectors. It has the ability to invest across the water and waste value chains, including in companies developing new technologies to meet ever growing demand.

Lead portfolio manager Bertrand Lecourt leverages Fidelity’s robust research and investment capabilities to find the most compelling investment opportunities in this under-researched sector, supported by assistant portfolio manager Saurabh Sharma.

Lecourt commented: “The story of water and waste is as old as the story of civilisation, yet companies in this sector remain relatively unexplored by investors.

“Investment opportunities in these sectors are driven by ever increasing demand for clean water and sanitation needs, as well as a better ability to manage the waste created by populations growing larger, wealthier and increasingly urbanised. There is no economy without water and there is no sustainable economy without waste management.

“Through a unique combination of water and waste investment opportunities, we believe this fund offers strong diversification for global equities, as well as significant growth potential and a boost to the Environmental, Social and Governance (ESG) profile of an investors’ portfolio.”

Alva Devoy, managing director, Australia at Fidelity International, added: “Today, our clients expect us, as stewards of their capital, to evaluate companies and company managements, on both their financial merit and on their approach and commitment to ESG factors. We approach this in an integrated way, with financial and ESG analysis happening in tandem.

“We have responded to our clients’ demands by substantially increasing our focus on sustainable investment analysis, including the recent introduction of our proprietary ESG, sustainability company ratings. These Fidelity ESG ratings uniquely provide a forward-looking evaluation of a company’s trajectory on ESG-related issues.

“Australian investors are increasingly focused on environmental concerns in particular, as they become more aware that their investments can have a direct impact on the important topics of climate change and water scarcity. In response to this, Fidelity International – Australia is now launching a global equity fund focused on waste and water, which sits neatly within an over-arching ESG investment framework.”

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Alva Devoy

Almost half (44.1%) of Australian women say they would not be financially stable if their relationship or marriage were to end tomorrow, new research from Fidelity International reveals. This compares to 29.7% of men.

Women are also vulnerable when it comes to job security with one in three (34.5%) saying they could only manage for up to a month if they were to lose their job unexpectedly, compared to 23.8 percent of men.

The research, conducted as part of Fidelity’s Value of Advice study, shows that women continue to be more financially vulnerable than men and this is having a significant impact on their health and wellbeing.

Alva Devoy, managing director of Fidelity International Australia, said: “The fact that a significant proportion of women worry about their financial security and don’t think they could manage if their relationship broke down or they suddenly lost their livelihood is very concerning, for more than just financial reasons.

“Financial stress has many different knock-on effects – it impacts physical health as well as mental health, and personal relationships. In our survey, more than half of women (57.7%) said that financial issues have adversely affected their mental health, compared to 47.8% of men. In addition, 41% of women report their physical health has been impacted, compared to 33% of men,” Ms Devoy said.

While the Fidelity research also showed that women and men are equally likely to worry about their retirement – 38.7% of women said they don’t feel particularly prepared, while 34.1 percent of men felt the same way – there was a stark difference in those they don’t feel prepared at all.

In all, 32.4% of women feel this way compared to 19.7% of men. Overall, just 28.8% of women feel very or reasonably prepared for retirement, compared to 42.2% of men.

As well, 60.1% of women believe they may have to keep working past retirement age to fund their retirement, compared to 50.1% of men, and 47.9% say that preparing for retirement compounds their financial worries and stressors, compared to 38% of men.

“Unfortunately, these concerns are very valid for women,” Ms Devoy says. “With women still earning less, as well as being more likely to take time out of the workforce to raise a family, superannuation balances for women are significantly smaller. This is a serious issue, especially when you consider that women’s life expectancy is longer. Closing the gender pay gap and helping women save more in their superannuation, as well as for a rainy day, are critical issues for our society as a whole, particularly in light of this year’s theme for International Women’s Day, Generation Equality,” Ms Devoy said.

Fidelity’s research report, The financial power of women, last year revealed some of the barriers that are preventing women from investing. However, encouragingly, this year’s study showed that women are open to receiving help, with 39% saying they have never received financial advice but would consider it.  Of those who have never received advice, 23.4% say the one of the key reasons is because they don’t know where to start.

Devoy continues: “The capacity of women to effectively access financial services and products remains one of the greatest hurdles to unlocking their financial power.  As an industry, we have a role to play in helping women to access the financial services they need to improve their financial and overall wellbeing.

“Achieving more financial security doesn’t necessarily mean earning more money but it does mean having a plan that helps women understand their financial position and what steps they need to take to feel more confident.”

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Alva Devoy

The mental health, family life and physical health of a large proportion of Australians are being adversely affected by financial issues, new research from Fidelity International has revealed.

Fidelity International’s ‘The Value of Advice’ report, based on a survey of 2,000 Australians, aims to take a pulse of Australia’s financial and overall wellbeing and highlight the positive impacts of financial advice beyond potential monetary gains.

It showed that for more than half (52.8%) of Australians financial issues had impacted their mental health, while other negative impacts included relationships with family and/or friends (48%) and physical health (37.3%).

However, while the report showed that many Australians recognise the benefits of financial advice – 49.9% of those receiving advice reported improved mental health – many aren’t seeking professional help in the way they would access other services to support their overall wellbeing.

More than three-quarters (77.3%) of Australians have seen their GP to address personal wellbeing issues, and more than a third (35%) have been to see a mental health professional for the same reason. This compares to 24.4% who have seen a financial planner.

Alva Devoy, Managing Director, Australia at Fidelity International, said it is clear there is strong link between financial security and overall wellbeing. “Almost three-quarters of Australians say they worry about money at least monthly, and just under one-quarter worry about it daily,” she comments. “And it’s not just those who might be thought of as ‘financially disadvantaged’. Almost 40% of Australians with at least $1 million of investable assets say they worry about money at least monthly.

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Alva Devoy

As the debate over active vs passive continues to rage in Australia, differing views on the benefits of ETFs have often been confusing for investors trying to work out the best approach for their hard-earned savings.

With the launch of Active ETFs, a new dimension has been added to the debate – investors choosing an ETF now have the choice between active and passive strategies.

To help improve investor understanding of these different choices, Fidelity International has made an e-book available to all investors.  Entitled: ‘Introducing Active ETFs’, it can be accessed through Fidelity International’s online learning hub.

Alva Devoy, managing director of Fidelity International in Australia, says the e-book shows how ETFs provide the characteristics investors are often seeking – access to active management, diversification and liquidity.

“Facilitating access to actively managed strategies on exchange, through the Active ETF vehicle, allows investors to build diverse portfolios in a straight forward and transparent way,” says Ms Devoy.

“Investors can decide which strategies suit their objectives best, be they active or passive, and combine these options easily to help them achieve the outcomes they are seeking, such as the opportunity to outperform the index and also to defend their portfolio against downside risk in periods of volatility.”

Active ETFs are relatively new in Australia having first launched in 2015.  Since then, they have become part of the debate whether active or passive is the right approach for investors.

“This can be confusing for investors and their advisers when it comes to choosing ETFs,” she says.

“At Fidelity, we don’t believe it’s a case of active or passive. Active plus passive can be a great combination for clients, especially if keeping fees as low as possible is a priority for investors. At different points in the investment cycle, such as during increased volatility, a higher allocation to active may be more appropriate, while when all markets have fallen precipitously, a higher allocation to passive should achieve good returns for a lower cost.

“Already, Australians are seeking to increase the diversification of their portfolios. Active ETFs offer an easy way to do this, as many clients will already trade and hold individual stocks and shares. With an increasing number of Active ETFs now available, buying units in an actively managed fund can be done in exactly same way and the holdings can be shown side by side in one portfolio.

“We are committed to providing education to Australian investors on the benefits of this vehicle, especially in enhancing diversification of investments and also in providing risk adjusted returns.

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In the role, Mr Doyle will help position Fidelity’s broad investment capabilities, strategy, markets views and performance to clients.

He joins Fidelity from M&G Investments in the UK, where he was most recently head of fixed income business development.  He was also responsible for establishing the investment specialist role at M&G, leading a team that covered fixed income, equities, multi-asset and property.

Ms Devoy says Mr Doyle’s appointment will be particularly beneficial as Fidelity continues to build its offering in the Australian market.

“Anthony will have a strong client facing role and will be the bridge between our clients and the portfolio managers and distribution teams.  This will help ensure that we understand the overall investment needs of our clients and where we can provide solutions through our range of investment capabilities,” Ms Devoy said.

Mr Doyle has over sixteen years’ experience in investments, starting his career as an economist with Macquarie Group in 2002.  He has also worked at Pioneer Investments in Dublin, Ireland, before joining M&G in 2009.  He holds an MBA from the University of London, a MEcSt from the University of New England, and a BCom from Macquarie University.

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Alex Duffy

Fidelity Active ETF Global Emerging Markets Fund (ASX: FEMX) is managed by experienced portfolio manager Alex Duffy and provides investors with access to a concentrated portfolio of 30-50 quality emerging market companies.

Alex aims to identify companies that are well positioned to generate returns through market cycles and have also demonstrated a strong corporate governance record.  He is supported by Fidelity International’s global network of 140 research analysts and 400 investment professionals.

Alva Devoy, Managing Director of Fidelity International in Australia, said emerging markets were the ideal asset class for Fidelity to launch its first active ETF. “As the global economy slows, our clients are increasingly looking to us to help them diversify their sources of returns.  Developing economies offer a fantastic opportunity due to a range of factors such as favourable demographics, the development of the middle classes and increased spending power.

“However, it’s important to understand that they are not without risk and in this uncertain market environment, active management is crucial. That’s why we’re excited to be able to offer investors access to our emerging markets fund through the convenience of an Active ETF.”

Alex Duffy, Portfolio Manager of Fidelity Active ETF Global Emerging Markets Fund, comments:  “Emerging markets have always been important to the global economy due to their size.  Over the last 20-30 years, we’ve seen emerging market GDP go from 30-40% of global output to almost 60%. In my view, this makes them too big to ignore.

“While some of these markets have faced tough times in recent months, we continue to find opportunities to invest in good quality businesses exposed to enduring themes such as the growth of consumption.  My focus is on those companies with strong corporate governance, strong balance sheet structures and good quality return profiles, all at a valuation that provides a margin of safety.”

Fidelity Active ETF Global Emerging Markets Fund (ASX: FEMX) is expected to open for investing on 29 October.

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