Real Brazilian currency Marcello Casal Jr/Agência Brasil
Published 04/28/2024 15:52
If only 10% of the Brazilian population between 20 and 64 years old currently has a private pension, the opportunity to capture this market is knocking on the door. With a positive scenario for reflection on retirement along with the almost 24% increase in revenue in the segment, companies have sought to circumvent traditional “banks” to win over potential clients, betting on usability, digitalization and diversification of funds and managers on the shelf to attract to an area that is commonly overlooked.
The positive moment for the growth of private pensions comes from macro factors such as greater awareness of the challenges of public pensions – amid the repercussions of the 2019 reform – and the drop in unemployment – which increases the contribution base -, in Felipe’s assessment Bruno, commercial vice president of Onze, a fintech focused on pension and financial health solutions. He adds that the new regulatory frameworks for supplementary pensions have also contributed to offering more confidence to the market.
And open private pension numbers have actually improved. The collection of plans in Brazil reached R$31.2 billion in the first two months of 2024, an increase of 23.9% compared to the same period last year, according to data from the National Federation of Private Pensions and Life (FenaPrevi). Redemptions fell 1.6% in comparison, to R$21.4 billion.
“In general, human beings want to be well now at the same time they want to have a minimum certainty that if they can make a decision, they will want to benefit from the resources they invest in in the future”, says Amâncio Paladino, Director of Products from XP Vida e Previdência. “Of course, the person needs to have the resources available to invest in pensions, but without going into that merit, people need to be aware that it is necessary to save thinking about the future. And this agenda is in the market discourse today.”
The executive has seen increased interest from investors – given XP’s base – in long-term planning. Operating for five years and with almost R$60 billion in assets under custody, XP is a portability leader and has a strong operation in PGBL (Free Benefit Generating Plan), which brings greater tax benefits in the asset accumulation phase.
Another piece of data that Bruno, from Onze, likes to look at, is the number of assets in open private pension plans in relation to the Gross Domestic Product (GDP), currently at 13%, around R$1.4 trillion. “Brazil’s pension savings are at a good number, but far from other countries that have more sophisticated regulation and policies that encourage the sector. So we still have a long way to go, but the trend is positive,” he says. Onze has around 100 thousand people served within plans in 200 companies, close to R$3 billion under management.
Focus on the journey and planning
Onze’s flagship product has always been the digital journey, according to Bruno. He says that corporate private pensions, which is the product that fintech works with, “as a rule was placed on the sidelines”, with “little investment and a bad usability experience”. “So we developed a tool that is intuitive and fast. We took processes that are historically slow and bureaucratic and managed to put them into the application”, says the executive.
The objective is for people to be able to do everything in the palm of their hand, from accessing information to carrying out transactions. And the appetite that company employees had for “easier” journeys is reflected in the numbers, given the acceptance of approximately 80% of the companies’ billing potential – both with portability flow and new plans.
But this “pain” is not restricted to private corporate pensions. In 2021, the manager Vinci Partners started a project focused on open private pensions after assessing that, in this “world”, the customer experience is still “very analog” – from contracting to monitoring the plan and any type of change or redemption. “So we imagined a more modern and digital experience, in line with the typical experience that a client today has in the world of financial services”, says Vinicius Albernaz, partner at Vinci Partners and responsible for Mio, the manager’s recently created pension arm.
Given the assessment of a dynamic market, with new entrants and still very concentrated on insurance companies linked to large banks, Mio was launched with a prevtech vision, with the journey in an application and personalized portfolio suggestions. The business should grow through partnerships, with financial planners and such as the one recently signed with SuperRico, and in the direction of offering the platform as a “white label”.
At XP, the advisory model brings capillarity and takes a “holistic look” at the client’s financial life, with the pension product “naturally bringing the conversation about wealth planning”, according to Paladino, from XP Vida e Previdência. He reinforces that there is no point in having this “in-depth” conversation with customers without a platform that supports this. “From the beginning we have valued technological development”
Diversification of funds on the shelf
For Albernaz, from Mio, it is necessary to offer clients “what the market sees as value in strategies that seek alpha” in private pensions. Thus, the Mio platform is open, that is, without restrictions on Vinci Partners funds, and there are conversations with more than a dozen traditional managers.
XP’s pension platform currently has 308 funds available, from more than 85 partner managers, in different asset classes. The minimum value for the first application is R$100. Paladino, from XP Vida e Previdência, highlights that in addition to the variety of products, it is important to offer facilities to the customer, such as receiving product documentation and monitoring profitability across the entire portfolio of investments – without being something segregated -, in an “integrated journey”.
