28.02.2025
From 31 March, LHV will end the external sales of pension funds and will focus more on the development of digital solutions.
‘A shopping centre is no longer the environment where such significant decisions should be made,’ the Chairman of the Management Board at LHV Varahaldus, Vahur Vallistu, said. According to him, this marks the end of an era, as the external sales of pension funds have taken on the identity of LHV over the past 17 years. ‘LHV’s goal is to contribute to the growth of the future security of Estonian people, and the introduction of pension funds in shopping centres has encouraged individuals to think more about the future of their II pillar pension. However, the time has come to stop external sales, as Estonians’ awareness and habits for obtaining information have changed,’ Vallistu noted.
Today, user-friendly digital solutions are key to reaching clients, and according to Vallistu, success will favour companies that dare to lead the way. He highlighted that it is in LHV’s nature to constantly experiment and do things differently. Even the launch of LHV’s external sales of pension funds was unique in Estonia, but today, all important services are just a few taps away on a smart device, and innovation does not stop. For this reason, LHV will now focus more on digital solutions rather than external sales, to ensure that pension-related information reaches people in the most convenient way. ‘We want Estonian residents to be able to learn about important topics at the moment that suits them best,’ Vallistu added.
According to him, Estonians are increasingly aware, due to the demographic situation, that relying on the state alone is not the best strategy for ensuring a dignified retirement. It is understood that individuals can do the most to secure their own future. ‘Already today, every other pensioner in Estonia faces the threat of poverty or social exclusion. It must also be made clearer at the national level that without additional savings, it will be very difficult to cope during retirement,’ Vallistu noted. He added that as a rule of thumb, about 75% of one’s current income is needed to live comfortably in retirement. According to analyses, the state pension in Estonia is expected to cover only about a third of the average salary in the future.
The desire to create financial security has also increased the demand for more thorough and personalised advisory services. In this regard, the opportunities, goals, risk tolerance, and time horizons of future savers vary. ‘In order to make a choice of a pension fund that offers peace of mind, it is essential to provide easily understandable and comprehensive information. Shopping centres are probably not the best place for this, and we will now focus on developing more effective pension advisory services through other channels,’ Vallistu explained.
Automating savings and making consistent contributions to the II pillar is one of the most effective ways to increase economic security. Vallistu recommends ‘tricking’ the mind to create financial security by making the most of the tax-efficient solutions offered by the state. ‘People are emotional beings. It is hard for us to give up something that is, figuratively, already in our hands, and we feel less of a need for money that does not reach our accounts for everyday consumption on payday. The II pillar works and grows investors’ money based on the principle of invisible saving,’ Vallistu clarified.
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