Philipp Zumbühl, part of Finpension’s management, dispels financial myths, offers retirement tips, and explains Finpension’s future goals.
Autumn tends to bring a wave of interest in retirement planning among Switzerland’s residents. What do you consider to be the most important criteria for choosing a retirement saving solution?
The most important thing is that the service provider is completely transparent. Why? Because my experience has shown me that most bank customers do not know how much they actually pay for banking services. If combined banking fees were ever charged to customers in the form of a bill, customers would be outraged. I am convinced of that.
Was there a main aha moment in your career that you feel changed your view on finances and retirement?
One big aha moment was when I realized that many banks offer retirement funds that are not actually real retirement funds. What do I mean? Many banks have their own funds which have one tranche for retirement assets, and one for regular assets. The problem with that structure is that both tranches of the fund are in the same investment portfolio. The result is that retirement assets end up being mixed with regular assets. Unlike true retirement funds, these pseudo retirement funds cannot benefit from the tax privileges for retirement assets.
About Finpension
Finpension’s founding began with the launch a 1e pension plan solution in 2016. Since then, Finpension has been constantly expanded to where it now offers a vested benefits account, a vested benefits asset management service, a pillar 3a account, and a pillar 3a asset management service. Its solutions for regular assets include an asset management service, an ETF savings plan, and private equity investing from one Swiss franc. Finpension already manages three billion Swiss francs of assets and has more than 30,000 customers (late 2024).
What are the most common retirement planning mistakes?
Many Swiss have a good understanding of the tax benefits that come with saving for retirement. Some invest their pillar 3a savings in securities with the goal of getting higher yields. I see that many people have got many things right in this regard.
Quite possibly, the most common mistake is lacking self-confidence and counting on salespeople disguised as advisors, which often happens with insurance. I want to embolden people in that regard. By simply getting a little bit informed, you can already take control of your retirement planning yourself.
Are there any myths that you would like to dispel?
The biggest myth, in my opinion, is the belief that you can earn money with trading. I repeatedly see advertisements online that promise easy money with very simple strategies, or claim you can learn how to trade. Unfortunately, that just is not the case, and I feel sorry for the people who fall for it.
It is important to understand this: People who make a profit on the stock market tend to announce it far and wide. People who lose money on the stock market are generally too ashamed to tell anyone. If you have been wondering why everybody other than you seems to be making money off the stock market, you now know why it seems that way.
What was your biggest financial mistake, and what did you learn from it?
My biggest financial mistake was investing in just a couple of stocks. It was a mistake for two reasons. Firstly, I made a big loss on one of the stocks, and secondly, I wasted a lot of my life on it.
Now that I have a family, time has become far too valuable to waste on the emotions of trading individual stocks. That is why I use Finpension’s investment strategies which, in addition to relieving me of administrative and emotional strain, also cost just a fraction of the fees charged by banks.
Are there any new trends or products that could be interesting for your customers?
The trend is clearly heading in the direction of digital offers. We have seen a sort of popcorn effect in that regard. First, you have just a few people who are willing to move to a digital solution. Many people are skeptical about whether or not these solutions will last. Over time, the skeptics see that the digital service providers are still around, and are managing successfully. Increasingly, you get fewer people who are willing to pay exorbitant fees to bank consultants.
How important is the feedback you get from your customers?
Thanks to our flat hierarchy we are able to remain close to the pulse. We do not have top-down management who makes decisions that contradict the needs of our customers. Still, we are not always able to meet all customer needs. Some customer needs can also make the product more complicated. We then have to weigh out which aspect is more important. We want to be the service provider that anyone can recommend with a clear conscience.
How is Finpension different from other fintechs?
Finpension has gained a unique position. No other Swiss fintech that serves private customers can claim to have become profitable without having given up its independence.
All other fintechs have, sooner or later, entered into cooperations with established banks. That almost unfailingly results in conflicts of interest which, in many cases, slow down or entirely prevent further customer-orientated developments. In that sense, what Finpension has already accomplished is less exciting than the perspective that Finpension and its customers have gained from the experience.
Where is your journey headed, and what are Finpension’s next goals? Are there new products in the pipeline?
We see a lot of potential in the mortgage business. In our point of view, banks run a sort of two-class society. As a potential customer looking for a new mortgage, you are treated like a king. But as soon as the mortgage agreement is signed, the bank pretty quickly assumes the position of power. We want to change that, and give the customer more flexibility and most of all fair interest rates.
Two things would be required in order for us to offer mortgages. Firstly, we would need a bank license. We want to apply for one in the coming year. Secondly, the mortgages would have to be backed with a lot of equity.
Let me make an example based on a customer who has one million francs of assets managed by us. The revenues we earn from that capital would have to be accumulated for more than 10 years to amount to the equity we would need to have in order to offer a mortgage the same size. Because of that limitation, it is very possible that demand for Finpension mortgages would far outweigh our ability to provide mortgages. For that reason, we have considered only offering mortgages to long-term customers who have already contributed to Finpension’s success.
More about Finpension:
Financial and retirement planning solutions from Finpension
