Two out of three working Flemish people worry about their pension and need a better overview of their financial situation. While they expect to need about €1,800 a month in their old age, the average pension amounts to just €1,200. That’s a significant difference: to provide an additional monthly income of €600 over 30 years of retirement, you need about €200,000.
The figures might make you dizzy, but the conclusion is clear: we’re worried about our pensions and not sure how to solve the problem. This financial illiteracy and anxiety is precisely why Bank de Kremer was founded in June last year.
Bank de Kremer wants to give people an easy, accessible way to safeguard their nest egg. So it developed a unique and handy tool: a free, anonymous and non-binding app that allows anyone to draw up a clear overview of their assets and understand how they can ensure a carefree old age.
The bank also offers personal advice at an office nearby. The young bank relies on the expertise, experience and infrastructure of Bank J.Van Breda & C° – for entrepreneurs and liberal professions – and Delen Private Bank, which specialises in private banking and estate planning.
Bank de Kremer’s services provide answers to pressing questions concerning the issues facing an ageing society. As we live longer, we need more money for our retirement.
Rational financial choices
But the social importance of this new enterprise is wider than that. Our lives are less linear than in the past – we change jobs and move house more often than we used to, and such changes all have an impact on our financial situation. Bank de Kremer helps people ascertain where they stand and provides guidance on making the right decisions for their future.
By presenting the facts in a comprehensible way in the app, the new bank helps people to manage their money in a more rational way. Financial choices are too frequently based on emotions. People are often scared to take even the slightest risk, with the economic crisis still fresh in their minds, or, at the other extreme, are too optimistic and even reckless with their investments.
For some, the new app can take away their concerns about the future by showing that they are on the right path, and in this way contribute to their wellbeing. Others will be confronted with the fact that their current situation won’t allow them to maintain their living standards after retirement, and they will receive customised advice to help them get back on track.
Sustainable investment strategy
The app first asks about your assets, income, expenses and saving capacity. On this basis, it simulates how much money you will have during your retirement and shows whether this is enough. If the result is negative, you immediately receive some basic advice to improve the situation, after which you can also arrange an appointment with an advisor.
It’s essential to determine the size of your financial buffer for expected and unexpected costs and a sustainable investment strategy that guarantees a long-term return. The app therefore gives users an idea of a good balance between safe products, such as fixed-term deposits, and more risky investments – for which it’s recommended to select global, actively managed funds.
Interest from younger savers
Bank de Kremer’s app has caught the attention of a wide audience. Although the bank focused on the situation among those in their 40s and 50s, it turns out that many younger people are also consulting the app. Their retirement may be a long way off, but they are already taking the issue seriously.
This article is based on an interview with Mieke Janssens (CEO, Bank de Kremer) and Dirk Wouters (CEO, Bank J.Van Breda & C°).
