‘Individual 'financial cockpit' gives every Dutch person clear insight into their finances’
21 mei 2021 • 3 minute read
Working people will become increasingly responsible for their own pensions due to the new Pensions Act (from 1 January 2023) coming into force. Insiders warn that citizens are far from ready for this. ‘Not by a long shot,’ says Clint van Haalen from Topicus. ‘People hardly have an overview of their finances. That's why it's high time every Dutch person got a real-time dashboard of their situation. Only then can you plan properly.’
We live in an age of big data which makes it even more strange that most entrepreneurs and individuals barely know where they will stand financially in the future. How their assets are developing or how high their pension will be. Whether that will be enough for a comfortable old age. And what the consequences will be if they take a year's sabbatical now, or get divorced. This makes financial planning impossible for most people.
‘Financial compartmentalisation’
The cause, according to Clint van Haalen, general manager of the Finance division at Topicus, is a strong ‘financial compartmentalisation’ in advice and execution. ‘Domains such as mortgages, savings, annuities and investments are separated as if by Chinese walls. A mortgage adviser only looks at your mortgage, an investment adviser at your investments... This way, as a citizen, you don't get one good overview, and it's almost impossible to estimate what will happen if something drastic changes in your life, such as the death of your partner, or big expenses for, say, a second house, a trip around the world or your dream car.’
Pilots with a single real-time view
Van Haalen advocates linking all individual financial information into one real-time overview. Topicus already has the software and platforms for this, and is already running pilots with it. Van Haalen: ‘Thanks to this software, thousands of employees of participating companies and organisations have access to their complete financial situation at the push of a button. That data comes from more and more sources, making the overview increasingly complete.’
Increasingly complete
That insight enables better financial choices. With this information, an adviser can paint an increasingly complete picture and give tailor-made advice on certain choices and their consequences. A good development, thinks Van Haalen: ‘His role is changing from salesman to financial coach: based on your current asset situation and accumulation, he can show you the consequences of financial choices. So that you know in advance how they affect your financial situation.’
Take the wheel
The impending introduction of the new pension system puts the idea of such a complete real-time overview high on the agenda. ‘The former pension, starting from age 65 and seventy per cent of your last-earned salary, is long gone,’ says Van Haalen. ‘Such a financial cockpit allows you to take the wheel yourself. Important, because you don't want to discover when you retire that you have to continue working for years because you have not built up enough assets. With this kind of dashboard, you can make timely adjustments.
‘Soon, everyone will be in control of their pension accrual; for that, complete information is indispensable’
Clint van Haalen Director Businessline Finance
Business loans
That insight helps not only individuals but also entrepreneurs. ‘First of all, of course, the approximately 1.1 million self-employed sole traders who have to take care of their own retirement. In addition, the risk assessment function is ideal when accelerating credit applications for mortgages or business investments. By linking all known parameters, Topicus software helps credit applicants and lenders quickly reach a balanced risk assessment. With data from as many sources as possible, we can make the whole picture clear and put the requested credit in perspective.’
Responding quickly is crucial
The latter is now more important than ever, especially now that many entrepreneurs have to borrow heavily post-corona to keep going. Van Haalen: ‘With a complete real-time financial overview, as an entrepreneur you know whether you can get the deal you want and what impact it will have on your finances in the future. If the advisory software immediately gives a 'green tick' on your application, you can sometimes skip approval processes,’ Van Haalen confirms. ‘Being able to respond quickly is crucial these days.’
Source: NRC
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