–> This is a pre-event interview in the run-up to the Leaders in Finance Future of Pensions Event 2024 on April 11, 2024.
Jeroen: Joost Tieland, thanks for taking the time to speak to Leaders in Finance in the run-up to the Leaders in Finance Future of Pensions Event 2024 on the 11th of April 2024. Could you first introduce yourself and tell us more about the organization you represent and a bit about your background?
Joost: Of course. I am Joost Tieland, representing Brand New Day, the market leader in personal pensions in the Netherlands. Brand New Day was founded in 2010 in response to a major scandal in the country known as the ‘woekerpolisaffaire’. We are an online pension bank mainly focused on retail consumers seeking to build up extra pension for their retirement. In addition to retirement products, we also offer saving and investment products for clients with goals for early retirement. Brand New Day currently has 6.5 billion in assets and more than 300,000 clients. As for my background, I have been working at Brand New Day for almost seven years now, serving as the Commercial Director responsible for marketing and sales. My career in the investment industry began at BinckBank, followed by index provider VanEck. After a brief period in consulting, I returned to my passion for finance and joined Brand New Day.
Jeroen: So, even though Brand New Day has been around for about 14 years since its establishment in 2010, do you still consider its relatively young age as an advantage?
Joost: Yes. We do have a bit of a legacy of course. In the IT-industry, for example, 14 years is quite old, but compared to our competitors (big banks and insurance companies) we are still relatively young, flexible, and agile. This allows for quicker adaptation and responsiveness compared to the main competition, which is definitely a benefit for us.
Jeroen: Right. So, when it comes to the newly implemented pension system, the WTP, what do you see as the most significant opportunity and, conversely, the biggest threat or challenge currently associated with this system?
Joost: The biggest opportunity lies in our focus on the third pillar in the Netherlands, specifically personal pensions. Not to be confused with collective pension schemes, rather individuals seeking to accumulate additional pension savings. After introduction of the WTP, people now have the opportunity to annually deposit two and a half times as much as in the past. This is actually a little present from the government to us, given our existing activity in this sector. Since the implementation of WTP last summer, there is a 50% increase in client deposits compared to the previous year. This favorable trend is highly advantageous for our business model, which is mainly driven on quantity. With a low-cost base, our goal is to gather as many assets as possible for it to become beneficial. So, that’s the opportunity; the fact that people have more to deposit.
The flip side to this is, and this is a key point for the panel discussion, that our competitors are also acting on this. While we have operated as market leader in relative tranquility, the landscape is changing. Asset managers and banks are actively considering entering this space with their own products, so there will be more competition. This is, of course, a threat to us. However, considering our track record and the time it took us to skillfully secure a prominent position in the eyes of consumers, I think a lot of parties might find it tough to gain a position in this market. They see a lot of opportunities, but they might underestimate what it takes to gain a significant position in this market. So, the primary threat lies in the intensification of competition, which can potentially devalue our position as market leader.
Jeroen: Makes sense to me. When considering the future beyond the next few years, what are your insights into the broader landscape of pensions? Looking ahead to 2030, 2040, or even further, do you anticipate significant changes, such as the continued existence of traditional pension funds, potential shifts in the roles of insurers and banks, and other overarching developments?
Joost: It seems there is a significant transformation happening in the market, with the WTP representing the initial steps in this evolution, potentially leading to WTP 2.0, 3.0, and beyond. I think and hope that pension funds will play a different role, allowing employees in specific sectors to be able to choose where they build their pension instead of being restricted to a specific pension fund. This seems outdated to me. Looking ahead to 2030, I genuinely hope the third pillar experiences substantial growth. I see an opportunity for us and our competitors to play a role in engaging individuals who are now not building pension, thereby improving our position among consumers who may not have invested in products with tax benefits for their future.
Looking further into 2040 and beyond, my vision is that individuals, regardless of their sector or position, can seamlessly integrate their salary and pension preferences. I hope by then you can, for instance, specify that you want your salary from one provider and build your pension with another, breaking down the rigid distinction between the second and third pillars, similar to the approach in the Spanish market.
Jeroen: That sounds very logical to me, let’s see how it all plays out. When it comes to the new pension scheme, is there something that you think the audience should absolutely know, or that you would like to share?
Joost: What I really want the audience to understand is that there’s a significant opportunity and potential, not only for the third pillar but also for Pension Advice and the second pillar. There is substantial work to be done in the Netherlands before January 1, 2028, when all pension funds are obligated to transition to the WTP schemes. While this presents a great opportunity, it’s crucial for us as a sector, including Brand New Day and other market players, to collaborate and grab this chance. If we fail to do so and don’t generate enough traction in the market, the government may intervene. The government sees it as their responsibility to ensure everyone has sufficient income when they reach their pension age. We should not miss the opportunity and risk the government imposing measures, such as obliging individuals to build up pension wealth in a state fund, as seen in countries like Norway and Sweden. If we don’t act, the market may become significantly smaller, and it is within our span of control to prevent that from happening.
I also hope that besides us our competitors and everyone in the industry will also seize this opportunity. It’s essential that as a sector we collaborate effectively to expand the market rather than competing for market share. We need to work together to enlarge the market. That’s why we are currently running commercials on television that focus more on the benefits of building up pension wealth in general, rather than specifically promoting Brand New Day. This reflects our main objective and concern, which is to work collectively to develop and grow this market.
Jeroen: Right. That is a very clear statement to the market to work together. For my final question, considering you are joining the event on the 11th of April, are there particular things that you will be looking for at an event like this?
Joost: For me, attending events like this is firstly about finding inspiration and connecting with like-minded individuals in the sector who are dealing with similar challenges. Furthermore, expanding my network is an important objective, because making a connection is crucial to work together and align. Of course, there is natural competition, which is fine, but there are situations in which it might be easier and more lucrative to collaborate and share common interests rather than compete.
Jeroen: I would like to thank you for your cooperation with Leaders in Finance. We are very much looking forward to have you at our event. Thank you Joost Tieland, Commercial Director at Brand New Day.
Joost: Thank you.
–> This is a pre-event interview in the run-up to the Leaders in Finance Future of Pensions Event 2024 on April 11, 2024.