I second you on that. I read this mail from VIAC on the toilets this morning and I thought I was reading spam, right timing for a dump!
Who knows probably there is another company behind which VIAC indirectly benefits from by doing that… Another reason why I hate insurances…
So VIAC, please listen to your customers, lower the TER and stop the marketing BS. Cheers!
I just tried to do the math. 1% of the population will die between 20-65. Roughly 4-5% of the population will get disabled in this time. So we can assume that Viac will have to add 25% for 5-6% of all the customers they’ll have.
Either I’m doing somewthing wrong or this translates to additional costs of 1.25-1.50%/year?
You’re assuming they will carry on this insurance forever which they probably won’t and don’t have any obligation to.
Much more likely scenario is they will get run into ground by a competitor in a few years, long before their young demographic reaches an age of sky rocketing mortality. Or the insurance will be forgotten, silently dropped in some subsequent AGB change, but the PR they are getting for it is now
Viac has 600 million under management. 600M AUM x 0.005 = 3 millions. Assuming a 30% margin, it’s 900’000’000 CHF. They can cost cut, they manage more money than Finpension.
For the base protection you have the possibility to switch between the risk of disability and the risk protection in case of death.
It seems to be either death or disability, not both. Also, there are different levels of disability. I would assume it’s only with 100% disability. Nothing yet on the web interface, but I would assume a premium option will be available, so VIAC will be able to increase their revenue @Cortana
You are right. They only need to pay it out once, so I overestimated the cost by a factor of 20-40. So it will probably be around 0.03-0.075%/year.
They could have reduced the TER to 0.45% instead of adding a useless insurance.
Interesting all this critical comments from most non-entrepreneur individuals, to explain how entrepreneur should make their business, by cutting their revenue (TER)? Most here are kind of frugal and with VIAC, so they do more right then wrong.
Insurance business (if not core-business) is a kickback business, so they expand probably a new revenue stream with a partner.
I hope I can opt out of this and get a 0.05% TER reduction.
lol you wish… Pretty sure thats not how it works
I agree with @OogieBoogie, the suggestions here are grossly simplified.
On the business side and to grow their revenue, it makes sense to offer insurance. For the customer, it’s better to cut TER
We are the customers. A company that doesn’t bother about what their customer-base wants won’t be around for long.
In the event of disability or death, you now receive up to 25% in addition to your pension assets. For every CHF 10’000 of assets invested in securities (calculated on the basis of the previous month), VIAC will provide you with free insurance coverage of CHF 2’500 (max. CHF 100’000) in the event of death or disability (70% – degree of disability).
This coverage is paid to you or your beneficiaries in the event of a claim in addition to your VIAC 3a retirement assets.
So it’s either disability at least 70% or death.
I agree with you, but they’re literally giving something away for free… I dont feel not cared about. Ofcourse lower TER would be amazing
Not limited to 10k, it’s just 25%. So 2.5k for every 10k.
Right, sorry
Maybe, this is also due to the pressure from Frankly (TER: 0.47) and Finpension (TER: 0,39 + VAT, so 0,42%)
You guys are hilarious.
Talking about useless features and switching, and then offering others to join them. 
From a business perspective: they chose not to compete on price.
I don’t think that it is necessarily stupid.
Speaking from the experience of a small business owner:
if you look at it from their side, there will always be someone who can offer it cheaper. As a small company you can only go so low with the price until you stop bothering about offering the product at all.
Better to address people who care about more than the price.
By adding features they make themselves less comparable.
People on this forum here will of course switch to a even slightly financially better offer but I suppose that for the majority of their existing clients it will probably make it more likely that they will stay.
It should be more in the range of 1/45*5-6%*25% = 3 basis points. The average risk per year is important.
I think Viac is realizing that their core business is really a commodity business.
If the value proposition is to provide low fees outsourced ETFs for a 3a pillar with a cool App/Website, your only differentiating point is how low your TER is.
Therefore it is only a matter of time until a competitor with enough firepower comes into the market with another solution/app/website with an even lower TER, and this is what we are seing with Frankly/Finpension.
The rule of the game in this paradigm is to get enough AUM to be able to charge a low enough TER so you are profitable at this level but your competitors are not, like what Vanguard and Blackrock are doing.
This is a winner-take-all paradigm which is especially enforced if it is easy for customers to switch from one provide to another.
In the long term, i could even imagine one of the legacy big players offering a ridiculously low TER where nobody is profitable (but which is subsidized by their main operations) so they can get all the market to themselves and weed out small players.
So yeah, i guess VIAC realized they are fighting an arms race to the bottom… in this situation, either they change their offering (not easy, see below), or they stay in a commodity business and their only hope is that all their competitors screw up…
A new player who don’t want to play by the rules and be more profitable has only hard choices:
I think many of us were waiting for the response from Viac before deciding to swich to Finpension. I see the response and I’m not happy with it. Therefore I will switch. Finpension is using the same Credit Suisse funds. And if I compare them it looks something like:
Viac Pros:
Finpension pros:
Afaik also no securities lending (Blue funds)?