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Fear & Greed, Fear and Greed

Women retire with 25-35% less super than men. And there’s rising rates of poverty and homelessness among older women.

Shannon Nutter, Head of Vanguard Super, talks to Jennifer Duke about why it’s time to close the gap on super – and how we do it.

Find out more: https://fearandgreed.com.au

See omnystudio.com/listener for privacy information.

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Jennifer Duke: Welcome to the Fear and Greed Business interview. I’m Jennifer

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Jennifer Duke: Duke. There’s a new analysis that paints a pretty grim

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Jennifer Duke: picture of retirement for Australian women. How Australia Retires is

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Jennifer Duke: a study by Vanguard, one of the world’s largest global

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Jennifer Duke: investment management companies. It has more than $ 12 trillion in assets

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Jennifer Duke: under management globally, and it found that compared to men,

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Jennifer Duke: women face significant challenges in the lead up to retirement.

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Jennifer Duke: This includes differences in their home ownership rates, personal super

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Jennifer Duke: balances, their own investments, annual income, and just their overall

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Jennifer Duke: confidence levels. So I wanted to take a closer look

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Jennifer Duke: at some of this research and get an idea of

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Jennifer Duke: what might be needed to change the situation. Shannon Nutter

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Jennifer Duke: is the head of Vanguard Super. Shannon, welcome to Fear

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Jennifer Duke: and Greed.

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Shannon Nutter: Great to be here. Thanks so much for having me.

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Jennifer Duke: So I wanted to have a look at the financial circumstances of

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Jennifer Duke: women before they retire, first of all, just in those

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Jennifer Duke: numbers. So a third of working age women reported a

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Jennifer Duke: super balance of less than $20, 000, and that was versus

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Jennifer Duke: about 12% of men in the same category. That’s a

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Jennifer Duke: pretty confronting statistic, isn’t it?

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Shannon Nutter: It is. And what we’ve seen is that women are

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Shannon Nutter: just not on equal footing when it comes to retirement.

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Shannon Nutter: They earn about 13% less than their male counterparts, and

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Shannon Nutter: they often work in lower- wage industries, take time off

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Shannon Nutter: to handle home issues such as kids or parents, and

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Shannon Nutter: they live longer, which okay, is great for us. However,

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Shannon Nutter: it means we actually need more in retirement. So it’s

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Shannon Nutter: a bit of a challenge.

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Jennifer Duke: So at the other end of the spectrum, there’s about

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Jennifer Duke: 60% of men who have a balance in their superannuation

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Jennifer Duke: of over $100, 000, which is more than double the proportion

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Jennifer Duke: of women on your research. What are some of the

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Jennifer Duke: reasons why that gap is just so giant? You mentioned

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Jennifer Duke: childcare is obviously one of them.

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Shannon Nutter: Right. And the wages, the roles that women actually have

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Shannon Nutter: when they work. But I think it goes beyond that

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Shannon Nutter: too. I think it also relates to confidence and it

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Shannon Nutter: relates to planning. So if we talk about confidence, well,

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Shannon Nutter: men just simply have more of it. They’re more confident

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Shannon Nutter: about financial decision making. So we saw that 50% of

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Shannon Nutter: men in the survey said they were very or extremely

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Shannon Nutter: confident making decisions related to managing their finances, and only

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Shannon Nutter: about a third of women said the same. So that’s

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Shannon Nutter: a significant difference. And if we look at the confidence,

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Shannon Nutter: that extends across products, it extends across confidence in understanding

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Shannon Nutter: things like shares and bonds and superannuation. And so all

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Shannon Nutter: of those things add up in terms of likelihood to

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Shannon Nutter: invest, likelihood to potentially invest in something that is well

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Shannon Nutter: suited to you, well diversified. And so one thing that

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Shannon Nutter: women might want to think about in terms of an

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Shannon Nutter: action is how they can move the needle for themselves

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Shannon Nutter: just a little bit to become more comfortable on these

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Shannon Nutter: topics. Not necessarily become experts, nobody has to become an

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Shannon Nutter: expert, but start advancing their knowledge in some way.

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Jennifer Duke: And what sort of things should they do to be

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Jennifer Duke: able to do that? Is that a simple case of

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Jennifer Duke: Googling and figuring it out, or where do they start?

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Shannon Nutter: It could be. I mean, it could be a call

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Shannon Nutter: to their superannuation to talk about products. Most providers have

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Shannon Nutter: basic information about their products and services, certainly on their

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Shannon Nutter: website. And hopefully, those are explained in an easy to

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Shannon Nutter: understand way so that folks can make sense of it.

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Shannon Nutter: And beyond that, I’d say there are certainly investing blogs.

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Shannon Nutter: There are groups for women in particular to talk about

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Shannon Nutter: finance in ways that feel comfortable to them. And there

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Shannon Nutter: may be women who have friends who are good at

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Shannon Nutter: this. So maybe just talk about it to some of

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Shannon Nutter: your friends. Maybe there’s somebody in your core group that

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Shannon Nutter: actually knows something about these things, does it well, and

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Shannon Nutter: is willing to share that knowledge. So I think there’s

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Shannon Nutter: a range of actions women can take and places that

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Shannon Nutter: hopefully feel comfortable for them to go and expand their knowledge.

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Jennifer Duke: I think that’s a great idea. And obviously, there are

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Jennifer Duke: things clearly then that women can do themselves. Is there

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Jennifer Duke: something that you think the government might want to do

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Jennifer Duke: in terms of closing this gap?

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Shannon Nutter: Well, I think certainly, we would support the government paying

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Shannon Nutter: super on paid parental leave. We know that women retire

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Shannon Nutter: with 25 to 35% less super than men, and there’s

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Shannon Nutter: rising rates of poverty and homelessness among older women. And

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Shannon Nutter: so that isn’t great. So if we could do anything

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Shannon Nutter: to close that gap on super balances, that would be

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Shannon Nutter: a good start.

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Jennifer Duke: Stay with me, Shannon. We’ll be back in a minute.

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Jennifer Duke: I’m talking to Shannon Nutter, the head of Vanguard Super.

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Jennifer Duke: And what about women’s expectations? Because I think the research

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Jennifer Duke: showed that women want to retire earlier than men, but

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Jennifer Duke: expect that they’ll actually end up working even longer.

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Shannon Nutter: Yes. And that is the case. Women would like to

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Shannon Nutter: retire at about age 62, but they expect to retire

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Shannon Nutter: when they’re about 66. And that number even extends if

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Shannon Nutter: you think about single women who aren’t part of a

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Shannon Nutter: partnered family. So I think what we have to think

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Shannon Nutter: about there is if that’s the case, we know that’s

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Shannon Nutter: what the data says, how do women start planning earlier?

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Shannon Nutter: How do they start putting some real thought to, ” I’m

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Shannon Nutter: going to retire at some point down the track. What

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Shannon Nutter: do I need to do today to get myself ready

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Shannon Nutter: and to feel confident?” What we saw in the survey

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Shannon Nutter: was that almost half of women surveyed, 46%, said they

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Shannon Nutter: had no plan or did not know what they needed

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Shannon Nutter: for retirement.

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Jennifer Duke: That’s crazy.

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Shannon Nutter: It is such a high number. And the opposite is

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Shannon Nutter: true for men, right? 73% of men said, ” Hey, I’ve

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Shannon Nutter: got a general plan, a good plan,” or, ” I know

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Shannon Nutter: exactly what I’m going to need for retirement.” And so without

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Shannon Nutter: that plan, even a basic one, it could be with

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Shannon Nutter: a financial advisor or it could just be sitting down

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Shannon Nutter: or using the tools available from your superannuation or another

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Shannon Nutter: financial provider to say, ” When do I think I want

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Shannon Nutter: to retire? What do I have today? How do I

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Shannon Nutter: expect that’s going to grow over time? What might that

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Shannon Nutter: look like when I’m of retirement age? What might that

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Shannon Nutter: translate to in terms of a retirement income? And what

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Shannon Nutter: can I do to boost that number?” And it might

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Shannon Nutter: be as simple as finding some extra discretionary dollars in

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Shannon Nutter: your budget to start making voluntary contributions, because we know

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Shannon Nutter: that women are far less likely to make voluntary contributions

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Shannon Nutter: to their super than men.

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Jennifer Duke: And I’m very curious around this financial advice sector because

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Jennifer Duke: just reflecting on my own personal friendship group, a lot

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Jennifer Duke: of my male friends all go to financial planners. Hardly

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Jennifer Duke: any of my female friends do at all. I find

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Jennifer Duke: that difference really, really stark. And you can actually get

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Jennifer Duke: financial planning funded through your super. I think that’s correct.

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Jennifer Duke: What do you think needs to be done to encourage

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Jennifer Duke: women to be, and I know you’re saying there’s a confidence

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Jennifer Duke: gap here, but how do we get them confident and

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Jennifer Duke: enough to go and sit down in front of a

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Jennifer Duke: financial advisor? What do you think we need to do

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Jennifer Duke: to push them along?

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Shannon Nutter: Well, I would hope some of the data makes women

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Shannon Nutter: feel a little more comfortable maybe going and asking for

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Shannon Nutter: help. The data would suggest that those who have a

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Shannon Nutter: plan, whether they created it themselves or whether they worked

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Shannon Nutter: with a financial advisor, are six times more confident than

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Shannon Nutter: those without a plan. And so sit down, assess your

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Shannon Nutter: finances, see what you’re earning, see what you’re spending, see

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Shannon Nutter: what you could potentially put towards retirement and feel comfortable

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Shannon Nutter: doing so. Even starting there is a step forward. Take

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Shannon Nutter: some action. We know that taking action makes you feel

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Shannon Nutter: more confident, more in control. So start doing that. And

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Shannon Nutter: then you could say, ” Okay, now I’ve pulled my things

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Shannon Nutter: together. My information is here. Let me go talk to

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Shannon Nutter: somebody.” Because I do think sometimes, there’s a bit of

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Shannon Nutter: a fear, and I think this is just human nature

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Shannon Nutter: of if I go talk to someone who is knowledgeable,

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Shannon Nutter: they’ll see that I’m not knowledgeable.

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Jennifer Duke: I feel like that every time I do an interview

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Jennifer Duke: with an expert on the podcast. So it’s a relatable

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Jennifer Duke: feeling, people.

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Shannon Nutter: Right? That notion of I don’t want to feel dumb.

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Shannon Nutter: And I think there is a history, to a certain

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Shannon Nutter: extent, in different industries of people making women feel a

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Shannon Nutter: little less. And so I think a lot of that

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Shannon Nutter: has changed over time, but being able to go and say, ”

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Shannon Nutter: Look, this is what I don’t know,” that’s okay. They’re

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Shannon Nutter: an expert. They’re supposed to be there to help you.

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Shannon Nutter: So I think that if that’s a concern for people,

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Shannon Nutter: they just need to hopefully let that go and just

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Shannon Nutter: go in and have a conversation.

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Jennifer Duke: Definitely. And I also wanted to ask about what role

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Jennifer Duke: businesses can play here, because there will be a lot

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Jennifer Duke: of businesses who are listening who will be wondering how

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Jennifer Duke: they can help their female staff members, and particularly those

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Jennifer Duke: who are potentially returning from career breaks, such as for

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Jennifer Duke: childcare. Do you have any tips for how they can

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Jennifer Duke: maybe educate or help their teams?

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Shannon Nutter: Well, I think there’s a few things that businesses could

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Shannon Nutter: do to help employees. I know at Vanguard, we pay

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Shannon Nutter: super on paid parental leave. So companies could certainly be

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Shannon Nutter: proactive in that area. And I think the onus isn’t

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Shannon Nutter: just on women to be proactive. What can employers do?

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Shannon Nutter: Such as offering free childcare, paying for super, we already

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Shannon Nutter: talked about that, but things that allow women to get

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Shannon Nutter: back to work and continue contributing. Now, we also could

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Shannon Nutter: have better experiences, better communications, things that work for women,

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Shannon Nutter: frankly, and help them get engaged, provide real insight.
So I think

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Shannon Nutter: the industry as a whole sometimes has just dumped information

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Shannon Nutter: on people, just lots and lots of information. Go sift

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Shannon Nutter: through it yourself. Go figure out what you need to

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Shannon Nutter: do. And the reality is, most of us don’t do

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Shannon Nutter: that. We don’t have the time to do it. We

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Shannon Nutter: don’t necessarily have the interest to do it. And so

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Shannon Nutter: the more that financial institutions like Vanguard and others can

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Shannon Nutter: break down that information into really insightful pieces and help

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Shannon Nutter: give guidance about what to do next to improve your

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Shannon Nutter: retirement outcomes, that’s going to be great for everyone.

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Jennifer Duke: I think that’s a really, really good point. And I’m

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Jennifer Duke: hoping there’s lots of women listening as well who are

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Jennifer Duke: going to go and do something about their super balances

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Jennifer Duke: now. And it’s Shannon, thank you very much for talking

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Jennifer Duke: to Fear and Greed.

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Shannon Nutter: Oh, thank you so much for having me.

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Jennifer Duke: And that was Shannon Nutter, the head of Vanguard Super.

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Jennifer Duke: This is the Fear and Greed daily interview. Join us

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Jennifer Duke: every morning for the full episode of Fear and Greed,

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Jennifer Duke: Australia’s best business podcast. I’m Jennifer Duke, economics correspondent for

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Jennifer Duke: Capital Brief, and filling in for Sean Aylmer. Have a

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Jennifer Duke: great day.