The Italian scaleup fintech company Moneyfarm has launched its first supplementary pension solution. It is an Individual Pension Plan (PIP), called the Moneyfarm Pension Plan.
Moneyfarm, the only digital wealth manager in Europe to pursue continental expansion with a presence in three markets (Italy, UK and Germany), now manages global assets of over $1.14 billion (€1 billion) on behalf of 45,000 investors, at a rate of growth that has always been double-digit year-on-year. The company has seen assets under management more than quadruple (+221%) and the customer base more than double (+114%) in the last 3 years.
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The Moneyfarm Pension Plan is based on 6 different investment lines
The Moneyfarm Pension Plan can be subscribed completely online and is based on 6 different investment lines, depending on the risk profile: Prudent Line, Moderate Line, Balanced Line, Horizon Line, Future Line, Share Line. The funds are structured with the same approach as Moneyfarm’s asset management: ETF underlying, diversification, simplicity, transparency and cost efficiency.
Regarding the cost efficiency, the product provides an annual management fee, regardless of the management line chosen, equal to 1.25% of the invested capital (against a national average of PIPs equal to 2.21%), in addition to an annual administrative cost of $11 (€10). There are no costs for loading, transfer, line change, membership, redemption and advance.
The synthetic cost index (SRI) over 10 years is 1.42% per annum: a much lower value compared to other PIPs on the Italian market and in line with the average costs of open pension funds (generally less expensive than PIPs as they do not provide any product consulting services). The premiums paid are fully deductible up to a maximum of $5,866 (€5,164.57) per year (as per current regulations).
There is also the possibility of allocating one’s own severance indemnity (already accrued and/or maturing) which, with the application of a rate from 9% to 15%, compared to the tax normally applied on severance indemnity paid under the ordinary regime (from 23% to 43%), can therefore enjoy a tax bonus of up to 34%.
Moneyfarm is adding a missing piece to the market, according to its founders
Paolo Galvani, co-founder and chairman of Moneyfarm, commented: “In 2019, as had already happened the previous year, there was a growth, albeit modest, in supplementary pension contributions, with +4.5% compared to 2018 (and resources under management amounting to $209 billion (€184.2 billion) in total). These figures actually show how far we still have to go to bring Italians closer to the supplementary pension system. Planning time and resources to ensure their well-being at the end of their work is an essential element in personal and family planning.”
Giovanni Daprà, co-founder and CEO of Moneyfarm, concluded: “In light of the current and worrying socio-economic context that sees, in addition to the well-known problems of sustainability of public welfare, a steady decline in the birth rate, the lengthening of life expectancy and an increase in the retirement age, it becomes fundamental for everyone to start thinking in time and concretely about a form of supplementary pension provision that offers an additional pension to their future pension. With the launch of our pension plan, we want to add a missing piece to the market, offering a product that is easy, transparent and digital, completely in line with our usual approach.”
Founded by Paolo Galvani and Giovanni Daprà in 2011 and specializing in online financial consulting and, above all, in asset management in Etf portfolios, Moneyfarm has to date obtained over $125 million (€110 million loans), the last of which, from $45 million (€40 million), in September 2019, led by Poste Italiane and in which Allianz Asset Management, a former shareholder of the company, participated. The previous round, for $52 million (€46 million), was closed in May 2018.
In October 2017, Moneyfarm acquired Ernest, a London-based startup founded in 2016 by three Italian developers (Cristoforo Mione, Lorenzo Sicilia and Niall Bellabarba), a personal banker powered by artificial intelligence. In November 2018 it acquired Vaamo, the first independent digital asset manager in Germany.
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First published in Be Beez, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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