There is a reason why SwissLife and alike make use of brokers: they can always put the responsibility for bad advice on the brokers.
According to Art. 45b VAG/LSA (Federal law on the supervision of insurance companies), the brokers must inform on the kickbacks they get. This article was newly introduced with the revision of Jan 1st, 2024.
It remains to be seen how prominent this information will be made (e.g., fine prints, etc.) and if this will deter people from signing those products when they see how much the person in front of them would earn from the contracts.
I think the main benefit of Life insurance based 3a is actually insurance. Everything else is added benefit.
So it might be a good product for people who want an insurance and want to save taxes at same time. It has its disadvantages as we all know and they should also be well understood.
I think when someone has never invested in 3a, it’s much easier to convince them to invest into 3a insurance versus people who already have 3a in frankly or finpension.
They make you believe that it’s a good product if these are your purposes, but in reality you can get a pure life insurance and 3a with VIAC, finpension, etc. with the same or even better benefits at a fraction of the cost without paying 1’000s as a commission to the agent.
It’s catastrophically expensive for what it is. One can get pure life insurance for half the cost and double the payout. I’ll defend that it is a solution for anyone not wanting to think about it and do some passive investing. But it’s still infuriating how so many newcomers - including myself - get done by this.
I understand the sentiment
But lot of people don’t know that there are cheaper options out there
Most people started with 3a plans from their banks until they moved to Finpension, VIAC, Frankly etc and let’s not forget the passive investment only works in presence of active investment. If everyone was passive then market will collapse. So even though I am passive investor, I hope active will work on their fees reduction and continue to exist
Same thing is happening with 3a insurance too. Traditional system has much higher fees. Disrupters are offering better solutions but still would take longer time to become first choice for most. Hence people make such mistakes
Fortunately for me. When I was new , I was offered 3a insurance and I didn’t invest. Not because I was smart but because I didn’t want commitment of X years to keep investing in that scheme. But on the other hand, I did end up starting 3a investment account with bank. Only few years back I moved the money out.
Agree, this is why I am trying to remain objective and fair.
3A with a bank is pretty good already, it is 100% safe (not vs inflation but safer than most other things people do) and gives a tax credit. 3A with insurance may have an upside vs a bank, if someone is unlucky enough where the insurance component actually kicks in, otherwise I think it’s objectively worse.
Finpension, VIAC and the like are a very very very small minority in the market - Europe is decades behind the US in terms of tools for financial planning and financial literacy, largely because we have, or had, decent pension expectations through mandatory pension contributions. At the same time we’re much better off in terms of being sensible and not trying to emulate whichever celebrity is hot today, and ruining our finances in the process.
The great thing for passive investing is that very little active investing is needed to provide the necessary corrections to the market which give, after fees, an edge to passive investing. I am confident active investing will continue happening even considering mammoth pension funds (like those of the US) being much more passive. I have no fear of passive investing dominating anything, primarily because it’s human nature to be competitive, it’s human flaws that make everyone think they’re smarter than anyone else, and because I know that every bit of inefficiency created by passive investing will eventually be discovered and exploited by active investors, therefore correcting it. There’s an interesting idea here: when I was trying to understand why shorting and options even exist I stumbled across the discussion that although these mechanisms have a definite winner and loser on each trade, they work for the benefit of the whole (market) system by fixing problems, therefore keep things in balance.
It is true that most people are not like those here, that’s why I maintain that even though it’s objectively a bad deal, 3A with life insurance is probably a decent deal for anyone not interested to learn more/take on more personal responsibility.
Hi @Lulu ! I am going through the same. In my case the broker deliberately lied to me. The possibility to transfer the money sitting in my 3a pillar account at any time was one of the mandatory conditions for me.
This was of course asked by me and confirmed by the broker many times but he never mentioned once that fees and who know what else would be deducted.
Of course this was just in words because at that time I was still naive and believed the system so did not ask for a confirmation also in written.
Also, in my case I asked to be sent all documents related to the insurance for my review, and the broker only sent me projections and a doc with some info but never the full condition document.
When we had the second meeting I based my questions on what I was provided with, he lead me to sign a contract on his tablet (telling me that this is common practice and much better than online signature). I said I wanted to read it, part of it says that I was sent the conditions (which I thought were the documents I was sent), and of course this was not the case
(I will not even mention how sneaky it was the whole process in convincing me that I absolutely needed the extra insurances because “otherwise I would have needed to leave Switzerland within 2 months if I lose my job”)
For sure I was naive and scared but I am also very disgusted by the fact that this is even legal.
However I cancelled the contract officially, since then nobody came back to me, just the same broker that scammed me trying to change my mind.
Since I confirmed my decision nothing happened, I asked to reach out to someone to confirm my surrender value and they initially gave me a number that does not work and then never answered.
Do not worry. It’s not that you have a problem or something. Indeed you get insurance as well.
As long as you understand the following, there is not much to worry about
invested money could have had better returns somewhere else
insurance costs might be lower if purchased individually
lack of flexibility (in terms of contribution amount and frequency)
buying commissions / fees
I suggest you just calculate what is your total cost of ownership to own this policy
annual ongoing fees
transactions fees at time of premium payment
insurance costs (if on top of ongoing fees)
exit charges (if any)
One point worth considering though-: normally people like to own different 3a accounts to allow for staggered withdrawal at time of retirement to optimise withdrawal tax. If you are linked to one policy, then it might not be possible.
Just wondering if you have been invested for 2 years, your contribution should have been 13.5-14K. Isn’t it? Why is it only 10K? Where is the rest? Lost in fees or something else?
Well, they didn’t lie, they just didn’t tell the whole truth and didn’t offer information not specifically requested. Wouldn’t hold up in a court of law. The 3A can always be transferred, but there can be costs.
Now this is indeed problematic but it’s cancelled out by you signing, of your own free will.
This suggests that there was no surrender value, otherwise you’d get a hard letter in the post with the final surrender value and confirmation of its transfer to another 3A provider. That was in my case.
This also sounds fishy AF. If you’re on a B permit you won’t have to leave, if you’re not on a B permit my understanding is that having insurance or not makes not a shred of a difference to immigration.
Nah, most people I know who’re uninterested in investing have a 3A with their bank for the tax credit and that’s it. Staggered 3A withdrawals are a bit more advanced for most people - and will likely be patched by the time many of us reach the withdrawal age. For the rest, I stand by like a zealot that insurance 3A is a terrible investment, the system is rigged to prey on newcomers who think everything is squeaky clean in Switzerland.
Hi @Mirager I agree with everything you said. Unfortunately, as I said, I was more naive at that time and did not know how it worked. There is nothing that “legally” can be used on my hand. Just a huge and expensive learning for me to use in life.
However, I really felt badly scammed, so horrible. And most importantly I felt I did not know how to exit this situation. Then fortunately I read online and I felt less alone.
For sure I have surrender value I am entitled to, which was also mentioned by the broker in his pathetic email to convince me to stay once again (but he did not say how much). I am waiting for the letter of confirmation from AXA, I am currently abroad and anyway I sent the letter and documents only 4 days ago. So hopefully it will be there waiting for me as soon as I am back next week.
I could see my surrender value on my account, in Swisslife’s site, you can sadly expect to lose ~40% of your contributions. You’re not the first who got done, so did I and many many many others…
@Mr.Paprika would you also send the info over to me? I am going through the same and wanted to know more. I read already all your messages in the conversation but if there is anything else, would you let me know?
In short, a lot of the responses to this thread are incorrect and frankly dangerous.
Re the AXA SmartFlex product, anybody pointing out it ‘has insurance’ is incorrect. It explicitly does not have insurance included unless otherwise requested. In fact, it operates on a premium refund model, whereby should anything untoward happen to you, your next of kin receive virtually everything you have put in as a refund. This is not insurance.
As for other commenters saying the returns are poorer than the banks, that’s laughable. AXA SmartFlex’s performance is here: AXA (CH) Strategy Fund - Global Equity CHF S Distribution CHF - AXA IM CH - Private
even allowing for last Monday’s dip in the market, the global fund has returned 49% over 5 years and 3 months. At times it was nearer 60%. Over 5 years, at 0.47% fee, you are still up roughly 46.5%, in other words about 9.3%. All of the data is clearly available on the attached link.
There is so much misinformation and frankly dangerous conjecture in this thread. If you are uncertain or want a second opinion always consult an independent financial advisor.
As you obviously have a strong opinion about this product, can you tell me why I should take this, when the performance looks the same as a MSCI ACWI with Developed Markets Hedged CHF Net?
I don’t expect AXA to beat the market so I’m not surprised that it only matches it. But to what price? TER looks okay but you usually have a ‘Ausgabekomission’ that can be up to 3.07%, no? If you actually get such a deal you would perform obviously worse than if you do a similar strategy at e.g. Finpension or VIAC.
Enlighten me if I havent seen through why this product is a good deal.
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