“In the light of the current and worrying social and economic background which, in addition to the familiar problems of sustainability of public welfare, a steady decline in the birth rate, the lengthening of life span and an increase in the retirement age as well, for all of us it is essential to start thinking ahead and seriously about a form of supplementary pension provision offering an additional annuity to our future retirement. Our Pension Plan launch is intended to fill a gap in the market by offering an easy, transparent and digital product fully in line with our usual approach”. This is how Giovanni Daprà, Co-founder and Managing Director of Moneyfarm, presents the Moneyfarm Pension Plan, the first solution for the Italian fintech but now European in scope, which has carved out a position as innovative savings manager with a digital approach.
Moneyfarm is now managing global assets of over €1 billion (on behalf of 45,000 investors), at a growth rate always double-digit year on year and in the last 3 years the assets under management have more than fourfolded (+221%) and the customer base more than doubled (+114%). The Company was among the first to adopt the “hybrid” consulting model blending high-tech innovation with the regular presence of a professional advisors. Moneyfarm has successfully proved in recent years how a new way to offer highly efficient investment services to savers by combining independent, conflict-free financial advice with a very simple user experience.
With regard to the issue of supplementary retirement plans, as mentioned by Daprà, the lengthening of the average life expectancy and the low birth rate, raises the issue of the sustainability of the pension system at the core of the public administration’s and citizens’ concerns in Italy and worldwide. In our country, to date, 70% of those eligible have not yet joined a form of supplementary pension provision, which would be part of the solution to the problem, also considering that the pension fund is a targeted, protected, flexible savings product and above all offers several advantages in terms of tax benefits. Moreover, supplementary pension provision is a supply rather than a demand product. On the one hand, it is perfect for online distribution and, on the other hand, minimizes distribution costs thanks to the digital leverage as a placement channel.
What the Moneyfarm Pension Plan provides for
The Moneyfarm Pension Plan, aimed at all those who wish to implement a supplementary pension plan, features an Individual Pension Plan (PIP) with a synthetic cost indicator (ISC1) among the lowest on the market, which can be subscribed completely online and based on six different investment lines (depending on the risk profile). The Moneyfarm Pension Plan provides for an annual management fee, regardless of the management line chosen, of 1.25% of the invested capital (compared to a national average PIP of 2.21% – Figure 1), in addition to an annual administrative cost of €10.
Strengths
- fully digital subscription, customized according to personal time horizon (six ETF lines – managed and rebalanced on the basis of the different market phases by the Investment Committee team of experts, with an increasing level of risk/return: Prudent Line, Moderate Line, Balanced Line, Horizon Line, Future Line, Share Line) and a dedicated advisor.
- flexible and clear: no restrictions on the frequency or amount of payments for the maximum freedom to schedule contributions according to personal needs, besides the possibility to monitor in real time the capital through the personal area (via desktop or mobile APP)
- Tax deductible: premiums paid are fully deductible up to a maximum of €5,164.57 per year (as per current legislation). There is also the possibility of allocating the employee severance indemnity (already accrued and/or maturing) that can therefore enjoy a tax bonus of up to 34%, with the application of a rate from 9% to 15%, compared to the tax normally applied on the employee severance indemnity paid under the standard regime (from 23% to 43%).
