Last update: 17.09.2024 08:37
elleXX, a financial platform for women in Switzerland, was launched in 2021. With elleXX Pillar 3a, it offers a digital pension product in collaboration with Bank Vontobel. With this product, elleXX aims to close the gender pension gap. We do the fact check for you. How good is elleXX Pillar 3a?
What is elleXX?
elleXX is a financial platform that specifically targets women and focuses on equality and sustainability. Their aim is to close the financial gaps for women. To this end, they are developing “women-friendly white label financial products” in cooperation with partners, according to a press release. There is currently (March 2023) an equity product in collaboration with Migrosbank, a pillar 3a product with Vontobel and legal protection insurance with CAP (Allianz).
What is the elleXX pillar 3a?
The elleXX Pillar 3a financial product is a digital 3a pension solution in cooperation with Bank Vontobel and the Vontobel 3a Pension Foundation. A comparison of the documents with Bank Vontobel’s offerings shows that the Vontobel products Volt 3a and elleXX 3a are very similar; the elleXX website calls the offering an “advertising partnership”. This procedure is known as “white labeling”: a provider (Vontobel) offers its product with a different product name via a different distribution channel (elleXX).
You open your pillar 3a online; this creates a (new) customer relationship with Vontobel via elleXX. You then have access to your pension solution via the smartphone app. If you have any questions, you can contact a Vontobel representative (elleXX (@) vontobel.ch).
What does elleXX’s pillar 3a offer?
How sustainable is it?
You can choose from five globally diversified investment strategies. Depending on the strategy, your money is distributed differently between equities (in the form of passively managed funds) and bonds. For all strategies, 2 % remains in the account as liquid assets. If you want to take more or less risk, you can adjust your strategy at any time.
| Investment strategy | Share percentage | Bond share |
|---|---|---|
| defensive | 10 % | 88 % |
| conservative | 30 % | 68 % |
| balanced | 50 % | 48 % |
| growth | 70 % | 28 % |
| dynamic | 98 % | 0 % |
It is not clear from the publicly available documents exactly how your money is invested. The benchmark indices listed for the product provide an indication. The performance of the product is compared with equity indices in the EU (MSCI EMU), the USA (MSCI USA) and Switzerland (SPI), with Swiss government bonds and international corporate bonds that are hedged in Swiss francs.
According to the product description, the investment process pays attention to environmental and social sustainability criteria. This includes funds that incorporate ESG factors, minimize sustainability risks and comply with the ten UN Global Compact principles. elleXX also aims to make a positive contribution to greater equality for women. This will come to fruition when enough customers have purchased the product. This is because they have contractually obliged Vontobel to “explicitly add investments that take particular account of gender equality and diversity above a certain volume”.
What is the minimum investment amount?
Deposits are invested from CHF 500.
Is elleXX Pillar 3a only for women?
No, men can also buy the product. From the point of view of the cooperation partner Vontobel, the cooperation is aimed at the target group of women, which banks find difficult to reach. “We are delighted to be working with elleXX. We can offer a solution for women that closes financial gaps through investment opportunities in the third pillar and thus actively contribute to reducing the gender pension gap in Switzerland.”
Is my money safe in pillar 3a?
Yes, quite, because your money is with Bank Vontobel or the Vontobel 3a Pension Foundation and not with elleXX. What would happen if your custodian bank (i.e. Vontobel) went bankrupt?
This is answered by esisuisse, a private self-regulatory organization of all banks that have a branch in Switzerland. This means that your 3a securities are not part of the bank’s bankruptcy estate, as they are only held in trust by the bank and are therefore not part of the bank’s balance sheet. In the event of bankruptcy, they fall to the Vontobel 3a Pension Foundation with which you concluded your 3a contract. The situation is different for 3a account balances. These are not covered by the esisuisse deposit guarantee – this only applies to private assets. However, 3a account balances of up to CHF 100,000 are privileged in the event of bankruptcy: they are placed in bankruptcy class 2, directly after the salary claims of bank employees in the first class. In order to secure the privileged deposits, the bank must provide collateral amounting to 125% of these deposits. CHF 1,000 in privileged deposits are therefore usually offset by at least CHF 1,250 in mortgage claims against bank customers.
What do the pillar 3a solutions with elleXX cost?
These costs are made up of a service fee (0.48% per year) and the product costs. The latter depend on your investment strategy. The costs per investment strategy can be found in the FAQs for Vontobel Volt 3a and amount to 0.21% to 0.26%. “The prices are exclusive of consumption tax (e.g. VAT)”, according to the “General provisions”. Depending on the investment strategy, the total costs are therefore between 0.72% and 0.77% (including VAT), as the following table shows.
| elleXX Pillar 3a investment strategy | yearly Total costs (incl. service fee, product costs and VAT) |
|---|---|
| Defensive strategy | 0.72 %* |
| Conservative strategy | n.a.* |
| Balanced strategy | n.a.* |
| Dynamic strategy | n.a.* |
| Growth strategy | 0.77 %* |
Fees for implementing the investment strategies incl. Service fee, product costs and VAT,
as at March 2023, sources: elleXX, product description and Vontobel.
elleXX provides transparent information on its website about the distribution fees it receives from Vontobel for brokering the products. This means that elleXX receives 50 % of the service fee, i.e. 0.24 % of your pillar 3a assets with Vontobel. This is included in the costs that you pay to Vontobel.
Is elleXX pillar 3a worthwhile?
We have researched how much you will have to pay in March 2023 for sustainable investment solutions with high equity ratios from selected, larger digital pillar 3a providers. You can find the results in the following table, which is organized by cost. You can see that some alternatives only cost around half as much and Inyova and Selma Finance are slightly more expensive. This also applies to strategies with an equity allocation of 60 %: finpension with its flat-fee model (0.39 %) and VIAC Global 60 sustainable (0.38 %) are also cheaper than the balanced strategy at ellex 3a.
| Provider & investment strategy | Total costs p.a. incl. VAT | Source |
|---|---|---|
| finpension sustainable 100 | 0.39 % | Link |
| Frankly extreme 95 active | 0.45 % | Link |
| VIAC Global 100 sustainable | 0.53 % | Link |
| ellex pillar 3a dynamic | 0.77 % | Link |
| Inyova 3a | 0.80 % | Link |
| Selma Finance 3a | 0.90%-0.69 % * | Link |
as at March 2023, according to the providers’ websites, all information without guarantee
* Fee depending on pension assets: 0.9 % under CHF 50,000, 0.77 % for CHF 50,000 -150,000 and 0.69 % p.a. from CHF 150,000
You may be thinking: What difference does half a percent make?
To do this, we compare two investments. On the one hand, we invest money in the investment strategy solution from elleXX (0.768 %) and on the other hand in the solution from finpension (0.39 %). In the model calculation, we pay the current pillar 3a maximum amount into both products for 25 years. We have increased this amount by 0.5 % per year and assumed a long-term (historical) market return of 6.7 % per year for the MSCI World. We therefore model ONLY the difference on the cost side of the products and assume the same performance.
You can see the result of the calculations in the chart. It shows that after 25 years with the elleXX solution you will have around CHF 25,000 (or 5.8 %) less assets with elleXX (CHF 425,300) than with finpension (CHF 449,800). This is due to the difference in fees. The fees reduce your annual investment capital more with elleXX than with finpension, and this has a significant effect over 25 years. Incidentally, Vontobel will pay almost CHF 10,000 from your deposits to elleXX as a distribution fee over the 25 years.
What are the product’s weaknesses?
The slightly higher costs will therefore reduce your final assets. In addition, you can invest a maximum of 90% in equities or always have 2% of your pension assets liquid in your account. Other providers offer you a higher proportion of equities (e.g. 99% with finpension or VIAC). So if you have a big appetite for risk, you can choose even more dynamic investment strategies with other providers.
Addendum July 10, 2023: elleXX has increased the equity component in the dynamic investment strategy to 98% according to the product sheet, bringing it in line with other providers.
Is elleXX Pillar 3a a good solution? What are the strengths of the offer?
elleXX offers a pension product that actively takes environmental and social aspects of sustainability risk into account in the investment process. As already mentioned, you have agreed with Vontobel in the cooperation that, from a (not publicly communicated) minimum volume, investments will also be made specifically in investments that “take particular account of equality and diversity”. If you opt for elleXX Pillar 3a, you are therefore supporting these efforts. With this product, you are also helping elleXX to provide information on the subject of pensions and investing on its website.
Summary elleXX Pillar 3a
With a pillar 3a, you want to close financial gaps in your retirement provision through investment opportunities in the third pillar. One option is the elleXX pillar 3a. It is a white label offer from Vontobel that is very similar to Vontobel’s volt 3a. The product is suitable for you if you want to take sustainability into account in your pillar 3a investments and support environmental and social goals and this is worth something to you.
We believe that you can make more of your money and better close your gender pension gap with other digital 3a solutions.
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