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Two new initiatives for European savers
18.10.2013

We at Guardian Wealth Management are forever banging the drums on the importance of long-term savings. Two new solutions caught our eye recently.

Blueprint for cross-border European pension products

The European Fund and Asset Management Association (Efama) announced its blueprint for cross-border European pension products, which sets out standards for a personal pension product that can be sold Europe-wide.

Aptly named ‘Officially Certified European Retirement Plan’ (OCERP), Efama suggests that, as well as a standardised product solution, OCERP could also transfer pensions between providers as well as countries within Europe.

For those financial advisers with clients working overseas who have built up several pension pots, the idea sounds like the perfect solution – or is it?

The pensions market has always dealt with the obstacle of transferability, so while OCERPS might sound good on the surface, they still won’t be able to overcome the legal, regulatory and tax hurdles which exist across each EU countries. It looks like a solution that will get the buy-in of all 28 member countries is a little way off yet…

ALFI aims to boost EU savings

The Association of the Luxembourg Fund Industry (ALFI) has called for the industry to broaden its appeal to savers in Europe.

Its report argues the case for broadening the appeal of mutual funds in Europe. Apparently, while the industry channels its focus on the wealthiest 10% of investors, those lower down the food chain have €4 trillion sitting on deposit.

To get your head around just how vast a sum this is, it is greater than the total value of household wealth in South America and 40 times the size of the fund industry in India.

While the report identified the impact the financial crisis has had on a lot of investors, prompting them to become more risk-averse, it also puts up a strong case for investing. Not only do the figures point to better performance by having a greater weighting in long-term savings even in light of the market turmoil, but they also show the added benefits of engaging with tomorrow’s wealthy.

These are points that resonate with all advisers in the aftermath of the RDR and the re-structuring of businesses and financial services generally. How can the industry as a whole reach a sector of the market that is currently so difficult to reach and costly to maintain?


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