The Spanish investment industry has just completed a milestone in its long journey since the early nineties when it began: it has already exceeded half a billion euros in assets under management, accounting for the volume of assets that it brings together between investment funds and plans. of pensions. With Inverco data from the end of September, it accumulates almost 516,000 million euros. This figure, which represents more than 52% of Spanish GDP, means 16% of the savings of Spanish families in financial assets. in products that, in the case of investment funds, have established themselves as one of the preferences of savers.
The long decade of zero and even negative interest rates and the entry into force of the European Mifid II regulations, which encouraged the implementation of financial advice, led financial institutions to mass market funds as an alternative to depositsand discretionary portfolio management, which facilitates greater customer loyalty, has helped consolidate a model that already accounts for 25% of the distribution of funds in Spain, which rises to almost 73% if advice is included. .
If the volume that Spaniards have in international investment funds is added to this half a billion euros, the figure would increase to 820,000 million euros.
Despite this high assets in collective investment institutions (the name used to group investment funds, companies and pension plans), Spain is below the European average in relation to the level of financial assets per capitadespite the fact that since 2012 the investment of Spaniards in funds has more than tripled, in a market still dominated by retail investment, that is, by individuals. Specifically, 62% compared to the 25% average in Europe. Hence, the sector considers that there is still a lot of room for improvement for a business that involves the development of the economy in the coming years.
Half a trillion euros is “a relevant figure, although the challenges faced by European economies regarding digital and sustainable transformation, to which the Draghi, Letta and Noyer reports already put figures, will make a decisive push necessary.” to collective savings vehicles, as a source of financing for the initiatives that will need to be carried out.”, underlines Ángel Martínez-Aldama, president of Inverco, the association that brings together fund and pension plan managers in Spain.
Improve the taxation of savings in Spain and introduce changes in the regulations on employment plansapproved two years ago by the then Minister of Social Security and current president of the Bank of Spain, José Luis Escrivá, would be the most necessary measures to promote vehicles that have served to finance the national economy with almost 150,000 million euros (the 10% of GDP) and which, in the case of pension plans, serve to complement the public pension with approximately 4,000 million euros, according to Inverco’s Social Report.
Martínez-Aldama insists that it would be important to implement a “much more stimulating” fiscal framework for the development of collective savings. Among the most important measures, the recovery of contribution limits to individual pension plans stands out, limited from 2022 to 1,500 euros per year, and a new boost to pension funds in companies, “with fiscal and non-fiscal stimuli, to that they are a real complement to the distribution system,” he emphasizes.
The CNMV has been in favor of adopting tax formulas that favor financial savings, and not only through investment funds, but also through savings accounts similar to those that exist in the United States and that countries such as Italy or Sweden have already applied. to encourage a long-term investment horizon, taking into account that the average savings in retirement plans of Spaniards is unable to cover even one year of pension.
From Unespa, the organization of insurance companies, firms that channel a significant amount of savings in Spain, are more incisive. Carlos Esquivias, director of Unespa’s personal insurance area, emphasizes that, “unfortunately, the pillars of employment and individual savings are underdeveloped” because “the recurrent changes in the tax treatment of complementary savings have affected the stability that social security requires.” to acquire cruising speed and grow adequately in Spain”.
Employment plans, stranded
The figures corroborate the comments of the sector. Two years after the Escrivá reform came into force, the public promotion employment plans are still stuck due to technical issues, and even so, as Esquivias recalls, “it will still take several more years to constitute and feed these savings”, still in the embryonic stage.
This is one of the reasons why Unespa advocates for a transitional system that would allow workers who do not yet have an employment system in their company to make temporary contributions to an individual system, within the limits of the employment systems. , and the obligation to transfer the consolidated rights to the employment system when it is established in your company, taking into account that to date, only 34 simplified employment pension plans (PPES) have been created, which accumulate approximately 232 million of euros, and that only one is sectoral, that of construction).
Faced with the poor development of the PPES, which represent only 0.61% of the total savings accumulated in employment pension plans, “the reduction of the contribution limit to individual social security systems to 1,500 euros per year has reduced contributions to these systems by 7.1 billion euros in the last three years. And if it is not reversed, it will be 2.7 billion annually recurring,” warns Esquivias.
Fernando Alonso de la Fuente, Strategy and Operations partner of the consulting firm finReg360, also considers it important to further harmonize the regulation of collective investment in Spain so as to reduce the existing gap with the rest of Europe, which generates, in turn, judgment, a “pernicious effect” of the departure or relocation of capital from Spain to more favorable jurisdictions.
The modification of the SICAV regime, the reduction of the exempt limit in pension products, delays in the transposition or European legislative developments and greater demands in the interpretation of the norm, as was the case of Mifid II, the application of the deferral regime tax transfers between alternative investment vehicles or free investment companies and other recently created vehicles such as the Filpe, or the adoption of facilities for the circulation of digital assets are some examples that the expert lists about “decisions that have been taken since the Spanish governments” detrimental, in his opinion, to the development of collective investment.
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