Over the past few weeks I've been chased by an AXA representative trying to sell me their Pillar 3a package (consisting of a Smartflex 3a investment account plus occupational disability insurance and premium waiver insurance in case of disability)

An overview of the product can be found here.

Is anyone familiar with this package? To be honest, the AXA representative made a convincing case, but I'm always very weary when someone approaches me out of the blue. Are there any catches?

I'm new to all this pension stuff, so really appreciate your guidance! Thank you in advance

I wouldn't touch it with a bargepole.

VIAC or finpension all the way.

Personally I go for Finpension with all the money in MSCI world ex-CH quality. I think that or the US specific investment or a mix thereof is probably the best bet.

Thanks a lot for your feedback HickvonFrick. Could I ask what in your view view sets apart the VIAC or Finpension plans from AXA? I'm a complete noob when it comes to this subject I'm afraid.

Well, with VIAC or Finpension you can invest 100% (well 99%) of your money in equities, which will maximise your returns in the long term, and pensions are generally long term investments.

For instance, I put my c. 6800 CHF into VIAC about a year ago, and this is already 9370 CHF - a return of 37.3%. There will be good years and bad years, but in general the good will likely outweigh the bad.

The Axa investments appear to have given a 2 year return of 13-16% - see https://www.axa.ch/en/private-custom...n/savings.html. This is very poor, and way behind the market.

Plus then they are trying to sell you insurance on top (if I understand correctly) - do you need this? Is it the cheapest option for you? I doubt it...

Yes, they are indeed trying to sell me insurance. I don't think that the occupational disability insurance is for me - I think that I get pretty good coverage from my statutory insurance as is. However, the premium waiver insurance in case of disability did seem somewhat appealing, but perhaps I'm completely misevaluating my needs here. The AXA representative made it out as though most Swiss residents take out such an insurance, but little do I know what the reality in this country really is.

Stay away. I had a look at what their funds cost and it is very hard to find out. They might have a lot of hidden fees.

The only indication is below. So TER is not the only charge. Fishy.

Investment costs
The price (indicative) includes all costs of the investment:
• fund management costs (incl. TER)
• fund administration costs
• fees for purchases and sales of fund units
Investments incur no further charges.

If you don't want the hassle of picking your own investments:

VIAC do a "Global 100" https://viac.ch/wp-content/uploads/V...bal-100-EN.pdf and "Global Sustainable 100". https://viac.ch/wp-content/uploads/V...ble-100-EN.pdf

Likewise, Finpenson do a "Finpension equity 100" https://3a.finpension.ch/factsheets/en/7

All will be perfectly good. There are less "aggressive" options, but really unless you are close to retirement age, I'd say it is better for your pension to be all in equities.

Thanks for the heads up mike_n - that's a very valid observation.

That's very useful to know - thanks. I'm 32, so agree that my money would be best invested in equities. I quite like the look of this VIAC - the information on their website seems pretty transparent.

I also use VIAC and finpension. VIAC is probably the easiest to use.
Stay away from insurance and such unless you have a housewife with children that need to eat if you die in a car accident. Even then, better to consult an advisor to understand your real needs and not just listen to brokers (your other insurances may already provide some coverage). Also with insurance you are locked in a contract.

That's a pretty misleading comparison and statement, comparing a single 12 month vs single 24 month during such a volatile period as the past 18 months. And the statement that a 2 year return of 13-16% is "very poor" would be nonsense in normal circumstances. What was AXA over the same period as your investment ? (BTW - I invested in a UBS fund in March 2020 and made nearly 60% to date, but I wouldn't use that one-off almost by chance timing as a comparator to judge other investments, such as your measly 37.3% - very poor )

To the OP. Firstly, you state you don't need the disability insurance, but are attracted by the premium waiver insurance - no, if you don't need the disability insurance, don't pay for it then you won't need the premium waiver insurance.

I thought the main point to avoid such pillar 3a from insurance companies as has been observed on this site many times is not primarily the return, but the 'lock in'. If you had a need to close the account early (e.g. leaving switzerland, use for mortgage etc.), you are likely to get back less than you paid in regardless of the fund performance.

Such a scheme has similarities to 'endowment mortgages' that used to be popular in the UK. These were insurance based investment schemes that included some life cover and aimed to pay off a mortgage after maybe 25 years. However, if you cashed in during the first 8-10 years you find most of what you paid in the early years has been in fact paid out in fees, largely to the nice representative that convinced you to sign up and your investment is worth less than the cash you paid in.

In addition (with the endowment scheme), every month the money paid in is used to buy some fund units (at a premium to the actual value), they then take some of those units and sell them again (at a loss to the actual value), making themselves a nice return, in order to pay fees (to themselves).

I was one lucky punter whose endowment mortgage has just matured after 25 years - my investment yielded an average of around 3% pa and fell short of the target value by about 20%. Luckily i paid off the mortgage 15 years ago and wrote this off as a serious investment.

Ask yourself why the nice man from AXA is so keen...

Disclaimer, I know nothing of the AXA product, the above is semi-informed assumption (but I bet i'm right).

Fair point. Their return in the last 12m is around 20-25% which isn't as bad as I thought. But *at best* it's going to be what you could do yourself in finpension or viac with (much) more fees. They are also all hedged to CHF which probably isn't sensible for a long term investment.

Thanks a lot for your exhaustive answer. My AXA broker is about to receive some bad news