Last update: 17.09.2024 08:32
Digital pension apps have become increasingly important in recent years.
This is because pillar 3a is a large market and an important component of retirement provision in Switzerland.
The apps promise simple and flexible management of your pension provision.
However, not all digital pillar 3a apps have been able to assert themselves on the market.
In this article, we take a look at three such digital pension apps: Pando 3a, Sparbatze 3a and Freya 3a.
Emergence of digital pension apps for pillar 3a in Switzerland
Digitalization has not stopped at pillar 3a either. Various providers have launched digital pension apps on the market in recent years. These allow users to manage their pension provision conveniently from their smartphone. The providers are fully committed to technology and can thus not only attract customers much more efficiently (= more cost-effectively) with lean processes, but also digitize the entire administration. This is why the costs of these digital providers are substantially lower than those of conventional offerings.
Nevertheless, your 3a assets are safe there. This is because the providers are regulated and your assets are safe with a foundation, not with the digital provider.
Banks and insurance companies are also trying to offer their existing customers digital 3a solutions or attract new, young customers with cool apps. However, some of these offerings are struggling to establish themselves and have drawn the appropriate conclusions.
Pando 3a from Swiss Life
Pando 3a was one such solution. It was launched by insurer Swiss Life in January 2022 and promised simple handling of personal pension provision. However, Swiss Life stopped advertising it in May 2023 and announced in November 2023 that the app would be deactivated at the end of May 2024. Payments into the account are possible until December 29, 2023.
Pando 3a wanted to score points with sustainability, climate and green issues. Investing should also be ecologically profitable. Pando offered customers three eco-impact funds actively managed by Swiss Life: “Climate”, “Environment & Biodiversity” and “Green Buildings & Infrastructure”.
The app enables customers to reflect the UN’s sustainability goals in their investment strategy. Functionally, the app is otherwise no different from existing solutions.
The exact reasons for the end of Pando 3a are not known. Swiss Life communicates “Unfortunately, Pando has not developed as we had hoped” and recommends that existing users transfer their assets to other 3a providers or to Swiss Life 3a Start.
However, with flat fees of 0.84% on pension assets and additional fund costs (TER) of 0.15%, Pando 3a is around twice as expensive as the price breakers and market leaders frankly, finpension and VIAC. Cost awareness of pension provision has increased significantly, particularly among the young target group that the selected themes are intended to appeal to. Not least due to the low-cost offers of the market leaders. This is probably why user numbers have fallen far short of expectations, as VIAC & Co. are recording high growth rates. Apparently, the sustainability surcharge was simply too high for customers. Those familiar with the project say that Swiss Life came to the conclusion that Pando 3a would not have paid off at lower fees.
Sparbatze 3a
Another digital 3a solution that is no longer available is Sparbatze 3a. The start-up was founded in 2018 with high hopes as a digital asset manager offering private pension savings in pillar 3a and asset management. The market launch took place in September 2020. Just under 1.5 years later, the start-up ceased operations at the end of January 2022. Customers were asked to transfer their pension assets held at Zuger Kantonalbank to Zuger KB or other providers.
According to CEO Ivan Sosio, it was not possible to secure long-term financing with the partners Vaudoise Versicherung and Zuger Kantonalbank. Both held a minority stake in Sparbatze. As with Panda, the fees (0.39 % basic fee and 0.38 to 0.50 % product costs, up to 0.89 % in total) were around twice as high as those of the price leaders.
Similar to Pando 3a and Freya 3a, customers could invest their money in various topics such as digitalization, health, greentech, but also green bonds or social development goals. Sparbatze also tried to differentiate itself with additional services such as free tax returns.
Freya 3a
The Freya 3a app is also no longer available.
The discontinuation of Freya 3a was announced by the operators of the app at the end of 2021.
The exact reasons for the end of the app have not been made public.
Although the exact reasons for the end of these apps are not known, it can be assumed that, like Sparbatze, they had difficulties establishing themselves on the market.
Various sources speak of a few hundred customers each for Freya and Sparbatze.
Like Sparbatze and Pando, Freya was aimed at customers for whom the topic of sustainability in investments is important.
The Freya fees are made up of a basic fee of 0.55% for custody account management and 0.3% product costs for the funds.
2 % of the basic fee is invested in Freya Community Projects, which are intended to support charitable projects.
Charitable projects or not: the total fees for Freya 3a of around 0.85% per year were therefore almost twice as high as for finpension.
Summary: Digital pension apps Pando 3a, Sparbatze 3a and Freya 3a
In this article, we have taken a look at three digital 3a solutions that are no longer available: Pando 3a, Sparbatze 3a and Freya 3a. All three providers are likely to be victims of the battle over fees for digital 3a solutions. This is because their target customers are clearly looking at the costs when saving for retirement. These solutions were not able to win over the trio of market leaders with fees that are around twice as high. In addition, the market leaders also offer very simple (flat-rate) fee structures: the fees are therefore not only extremely low, but the costs can also be seen at a glance.
Digital 3a pension apps from fintechs in the 120 billion private pension market are therefore not a sure-fire success. A clear, unique value proposition, fees on a par with the market leaders and sufficient funding are needed to ensure lasting visibility in the market. But don’t worry: there are plenty of other digital pension apps on the market. Good for you, because they ensure effective competition in terms of fees.
Our pillar 3a tips: Use the product finder
Unbelievable – most people pay far too much for their pillar 3a and get too little return. Are you one of them? Find out which pillar 3a solution with securities suits you best with just a few clicks in our free 3a comparison. View the profile of the providers. Or click directly through to the provider.
