ERFF Working Paper December 2020

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by The European Retail Financial Forum (ERFF)
December , 202  –   5 min read

ERFF Working Paper December 2020

Issues & Solutions for Retirement Savings & Investments
Working together to create long-term financial security for European households

The European Retail Financial Forum (ERFF) is a consumer-focused, pan-European industry platform. Launched in the European Parliament in 2015, ERFF was set up in response to the European Commission’s stated ambition to expand the dialogue on opening up retail financial markets in Europe and to engage with ‘all stakeholders around one table’. We particularly welcome collaboration with consumer groups. Our main activities are business/consumer dialogues, technical workshops with EU policymakers and our annual ‘Consumers at the heart of finance in Europe’ conference. www.erff.eu


Introduction
The purpose of this paper is to help the ERFF explore issues in 2021 that go to the heart of the ageing population challenge and the role that retirement income savings can play in the financing the Covid recovery and Green Deal policies. This work complements the work of the ERFF in examining solutions to the more immediate issues facing retail consumers from Covid economic impacts.

     1. Increase household retirement savings and raise citizens’ awareness and level of financial literacy

Opportunity
There is a need to improve the long-term financial security of many European households, with an eye on retirement income savings. Public pension systems risk becoming unsustainable. The ability of second pillar pension schemes to deliver expected retirement incomes is increasingly at risk in the face of an ageing population and very low returns due to numerous aspects such as risk aversion, regulation and low interest rates.

In many countries, governments now seem determined to act and promote the increase of retirement income savings…

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Press Release 03/2020

Joint Press Release – For immediate release
March 27, 2020  –   4 min read

Photonike Capital SA – Nucleus Holding II SCS:
new acquisitions and effect of Coronavirus

 

Photonike Capital SA (Euronext Access Symbol: MLPHO – Brussels) and Nucleus Holding II SCS (Luxembourg) announced today that they have enlarged the Joint Venture agreement signed on

November 2019.

 

The purpose is to put beside Nucleus Life AG, a life office in operation since 2006, the life insurance company TriCap Assurance SPC in operation since 2007 in the B2B Life Insurance market, exclusively offering “contrats dédiés” (wrappers) to High Net Worth Individuals.

 

The total investment of 10 million euros for the Project is fully financed by Photonike Capital SA using its own resources.

 

The consideration paid includes the possibility of converting the investment into shares of the various investments.

 

Thanks to the new acquisition the group reach over 1,3 billion Euro AUM and a several highly

experienced managers joints the Nucleus family.

 

The joint venture will focus on both top ten worldwide life insurance markets, offering to mass affluent and upper mass affluent customers a suite of innovative unit linked products to meet the investment diversification needs arising from a context of low interest rates.

 

As the World life insurance market is reaching an unprecedented turning point due to the most severe crisis the world has experienced, Photonike Capital SA and Nucleus Holding II SCS are willing to promote new business opportunities in conjunction with an existing distribution network of over 70 brokers and financial advisors and to add over 1,4 billion Euro AUM at the end of the fourth year to the current activities of the group.

 

Fausto M. Ventriglia, president and founder of Photonike Capital SA said that “in Italy, the distribution remains confident in the future, and the Agreement also provides that the distribution will be enforced with the implementation of DLT (Distributed Ledger Technology)/Crypted IT platform for remote subscription and long-term conservation of the contracts”.

 

Vincent Derudder, CEO of Nucleus Holding II SCS expressed “great satisfaction with the agreement

because it allows strong industry, product design and distribution synergies in the coverage of the

insurance risk”.

 

Both also praised the excellent experience and ability of the managers involved in the project supported by the positive message received from the representatives of the industry such as David Charlet, Chairman of FECIF, the 300,000-strong intermediaries trade association stating that “we will all need to be adaptable, resolute, and particularly conscious of society and others, not just ourselves. Focusing on “us” and “we” rather than “I” and “me” is imperative”.

 

Photonike Capital SA (Belgium) and Nucleus Holding II SCS (Luxembourg) inform that the operational activities of Nucleus Life AG have not been slowed down by the Coronavirus epidemic. The company provided for IT infrastructure dedicated to financial advisors and customers, with specific webinars on the products offered with more then 100 participants per time. Thanks to the organization, support is provided to producers and policy subscriptions have not undergone substantial slowdowns.

 

More details:

Madelaine Hellemans

mjh@nucleus.lu

 

Claude Chapelnote

info@photonike.com

 

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Investment Letter / August 2020

by Vincent WEGHSTEEN
August 1st, 2020 –   4 min read

Global Stocks and the Economy

The news continues to be overwhelming and devastating. Deaths from Covid-19 in the United States have moved above the 135.000 people, nearly 50 million Americans have filed for unemployment insurance and the country is in state of grief and rage over racial injustice. It’s getting easier to understand the skepticism associated with the perceived disconnect between real life pains on Main Street and the resilience of Wall Street.

The economy entered a recession in February and it dropped 5% in the first quarter. Industrial production and retail sales had the worst drops in 101 and 73 years, respectively. Unemployment is at levels not seen since the Great Depression when unemployment reached 26%.

It’s expected to stay high. If so, it will reinforce that we are indeed in a depression or headed for one. This has resulted in unprecedented money creation. In fact, the Fed’s balance sheet is now at a new record high of USD 7 trillion. This is an increase, which is already three times larger than the rise following the 2008 financial crisis. This in turn, will likely fuel inflation, sooner or later, probably following the recession. Some are calling for stagflation (slow economy and inflation). But whatever the outcome, the soaring cost of food to the highest levels in 46 years could be a sign of things to come.

For many years the US has depended on foreign investors to finance their deficit spending by buying US governments bonds, but now , with higher tensions, they have been selling their bonds by the most this century. This goes for China and Saudi Arabia to name just a few. This means, the Fed’s going to have to raise interest rates to attract foreign buyers back to the fold. And if inflation perks up downstream, this will only add fuel to the fire because interest rates and inflation tend to rise together.

So , where are the stock markets going?

Monetary and fiscal stimulus, and more recently news on virus treatments/vaccines, have fueled an epic run up from the lows. Ultimately though, equity prices depend on economic conditions and corporate earnings. There is the risk that the stock market is not accurately reflecting second-order and longer-term economic impacts of the virus and attendant economic shutdown (including bankruptcies and temporary layoffs becoming permanent job losses). There is also a risk that the stock market is not accurately reflecting the weakness yet to be fully felt in corporate earnings.

That said, it’s always wise to heed the market’s messages. Fiscal and monetary support has been unpredecented and could ultimately overcome the damage to the economy. Our advice to investors trying to navigate these uncertain waters has been consistent this year: rely on tried-and-true disciplines like diversification and regular rebalancing. Keys to long-term investment success do not rely on the precise timing of market tops and bottoms. Investing is , and always has been, a process over time. It should never be about moments in time.

Stay tuned!

Vincent Weghsteen

Analyst Nucleus Group

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