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We observed continued growth in units of account throughout 2019. The proportion of fund inflows reached more than 40% in December 2019, when the markets were at their highest. This growth was mainly driven by the desire of savers to diversify their savings in a context of persistently low interest rates. 

Given the evolution of financial markets linked to the COVID 19 health crisis, what could be the reaction of savers with regard to their savings and what policy could insurers put in place to deal with this new context?

Panicked and without advice, the main risk could be that savers completely turn away from units of account or in the worst case, buy back their contracts. A reaction that is not impossible when we know that savers do not always behave rationally in the face of risk. This situation should nonetheless be limited by the strengthening of the duty to advise, the systematic measurement of the investor profile of savers and the pre-contractual documentation which entered into force in January 2018 under the PRIIPs directive, provided that it is read and understood by savers. In addition, the sales departments have invested heavily and equipped their advisers with tools to facilitate the underwriting process in order to ensure the adequacy of the contracts taken out and the long-term objectives of their policyholders while maintaining sufficient protection of the policy. savings invested.

We will understand here the important issues of advice and pedagogy, both for the subscription and during the life of the contract. However, in recent years, “self-care” spaces have been enriched with functionalities allowing savers to act directly on their contracts, which aims to simplify and accelerate management acts with a view to improving the client experience. But what are the “firewalls” of these functionalities accessible to all savers without taking into account their financial knowledge and their sensitivity to risk. Thus, Boursorama Banque had to take temporary measures to block part of the savings invested in its CEFP in order to limit partial redemptions. Undoubtedly an opportunity to strengthen the role of the manager and to strengthen his role of supporting policyholders in the management of their contracts. 

The role of asset advisers therefore remains essential in order to continue to make savers aware of the need to diversify their savings in order to reinvest in a reasonable, progressive manner, with a long-term perspective and in line with their investor profile. In the midst of a health crisis and a period of confinement, courtesy calls from advisers are increasing to maintain proximity with their customers and ensure their advisory mission. This involves reassuring and reminding savers of the context in which their contract is taken out and their consistency with the long-term objectives they are pursuing. In addition, insurers have largely pushed management offers under mandate, management offers profiled or horizon which has allowed savers to delegate the management of their contract to their insurer.

Finally, the financial impact is not negligible for life insurers either . By having encouraged savers to move towards unit-linked accounts (some with performance bonuses on the euro fund), the financial result based on assets under management therefore becomes more sensitive to market performance.

Already in 2017, some asset managers, Fidelity in particular, had gone even further in aligning the objectives of the saver and the manager. Fidelity had linked part of its management fees to the outperformance of its funds relative to benchmarks. An incentive that could also apply to management contracts under mandate to better promote it and encourage savers who are still resistant.

Rhalid Bouakhris, senior consultant

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