It's a worrying trend: a large share of the population starts planning far too late. For many, even the final years before retirement pass without the necessary financial groundwork.

This is the conclusion of study by Raiffeisenin collaboration with the Zurich University of Applied Sciences (ZHAW).

Major knowledge gaps

The same study shows that only about 20 percent of non-retired 60-year-olds are considered well prepared. Although knowledge about retirement provision and pensions increases with age, the younger generations still have major knowledge gaps.

This is consistent with the results of the Fairplay study by Vita: only 42 percent of working people know the difference between mandatory and non-mandatory pension fund contributions, and among younger people the figure is only one-quarter.

Growing loss of confidence

Roland Altwegg, Head of Products & Investment Services and member of the Executive Board at Raiffeisen Switzerland, is worried about another trend: «Confidence in the first and second pillars has declined significantly in recent years,» he says.

There are many reasons for this: the younger generation needed to secure retirement provision in the long term is lacking due to the low birth rate. Low interest rates weigh particularly heavily on the second pillar; annuitization is becoming increasingly difficult for pension funds, and conversion rates are steadily declining.

«In fact, one can never start early enough to engage with Switzerland’s three-pillar model. It should already be part of elementary school education. Our experience shows that the willingness to address the issue only arises for many when it is already too late to take targeted action,» says Altwegg. 

Financial service providers’ responsibility

He also sees financial service providers as having a responsibility. For this reason, Raiffeisen began some time ago to systematically and proactively integrate individual retirement planning into its basic advisory services.

The cooperative group’s range of products and services extends from easily scalable offerings such as pillar 3a savings to very specific and individual advisory services in the areas of estate planning or execution of wills.

Strengthening customer relationships

From the bank’s perspective, this is also attractive, Altwegg says: «We can strengthen relationships and gain much deeper insights into our clients’ needs.» 

The group currently serves around 3.7 million customers in the area of retirement planning alone, including 2.1 million members, with total assets of around 306 billion francs and client assets under management of  262.7 billion francs.

The pie is not getting smaller

In the area of pension funds, clients can choose between actively managed and index-linked strategy funds. Both product types can also be used in vested benefits accounts and in unrestricted pillar 3b savings.

Raiffeisen is by no means the only institution to have embarked on this path. Increasingly, insurers are also moving into this area. Altwegg is unconcerned: «The pie isn't shrinking—on the contrary, it is steadily growing. As retirement planning becomes increasingly important, so too does the interest in it,» he says.