If people want to make better financial choices, they need to get a grip on their financial affairs earlier and more often, say Paulien van Gurp and Henk-Jan Boersma from Prikkl. APG took a 40 per cent interest in the financial coaching and advice platform today. Both share the same mission of removing the barriers to financial insight. Sounds great, but a bit abstract. How do you do that exactly?
It’s one of the goals that APG sets itself: making people in the Netherlands ‘financially fitter’. In other words, helping people get a good grip on their financial affairs so they can make informed choices. APG has been achieving this by developing various initiatives and tools to support APG affiliated pension fund employers and participants. The partnership with Prikkl is the most recent addition to this armory. Prikkl has been helping companies ensure their employees financial ‘agility’ since 2017, via a combination of software and personal advice. Chris Veerkamp is involved in the partnership as business owner from AGP: “We share the conviction that every person in the Netherlands is entitled to accessible and affordable financial coaching. And we want to encourage people to use this.”
Where does this “urge to encourage” come from? Don’t people simply seek advice if they need it?
“That’s exactly the point. The barrier is too high for many people. It’s too expensive, or too much work, the result being that they often seek financial help too late. If you only seek help when it’s become a real emergency, the options are very limited. People only talk to the bank if they’re actually going to buy a house and only start investigating early retirement if they don’t feel like working anymore and state retirement age is approaching. But they’d be much better off thinking about this when they’re forty, when they can still do something about it,” replies Boersma.
Veerkamp adds: “And ‘doing something’ means making choices. The introduction of the new pension system is making these choices even more important. It will make pension levels less certain and people will need to know the potential impact of their choices in time. Buying a house, early retirement... How will these affect your finances and income now and later?”
And Prikkl and APG will be helping with this?
“Of course, that’s the aim. We want to make sure that we can offer services to pension participants at the moment that their finances play an important role; give them the right information at the right time. This means offering quick support that’s tailored to people’s circumstances instead immediately coming up with a complete financial plan. We want to help people make financial choices in their lives or careers; preferably before these choices come up,” says Veerkamp.
Isn’t it difficult to anticipate these choices?
“Of course, and that’s where the challenge lies,” says Veerkamp. “On the other hand, as APG we know from experience which problems can arise, which choices people will make, and what impact these can have on their pensions. Through our funds, we have a lot of contact with clients every day. This means we hear what’s important to people and employers, including with respect to finances. We should be able to use this more so that we can facilitate and help people.”
“And a lot of behavior can be predicted. It’s something you can anticipate,” replies Boersma. “A good example is first-time buyers on the housing market. All they hear about is how low their chances of buying a house are. That may make them abandon the idea. When a first-time buyer starts working for an employer, we can chat to them while the contract’s being drawn up. We can then make a quick calculation of their potential maximum mortgage so they can see whether they’re likely to be eligible to buy a home. This gives people the chance to consider options they wouldn’t normally have thought of.”
Van Gurp continues: “That’s also the core of our approach. We first look at someone’s financial situation and use this to decide which solution or approach is appropriate.”
Do you only focus on employees and employers?
“In principle, yes,” answers Van Gurp. “The employer is an important and reliable link in helping employees with their financial affairs and encouraging them to take action. We don’t target self-employed persons and freelancers, although we do of course help people who are considering starting for themselves. Who knows? Perhaps we’ll focus on the self-employed and freelancers in the future.”
APG also offers other services aimed at financial fitness, such as Kandoor and Geldvinder. What do Prikkl’s services add to this?
Veerkamp adds: “The services we offer as a ‘trusted guide’ for employers and employees are still very application and platform-driven; they’re largely only online tools. Prikkl combines advice software with personal support from a financial advisor. Moreover, Prikkl focuses on financial coaching and advice across the board – not just on pensions. We can also learn a lot from this. Partnerships with parties outside of APG mean that we don’t need to do everything ourselves to be a trusted guide for employers and participants. It is, however, important that these services enhance each other. They should be a sum of their parts.”
What are the next steps in the partnership?
“We’re going in two directions. We’re investigating how we can make optimum use of Prikkl’s current service for employers and employees of APG's affiliated pension funds. And we’ll also be investigating the development of two new propositions in the coming months. These are new ways to combine Prikkl’s knowledge and services with what we do at APG,” says Veerkamp.
When will you be satisfied?
“When we can really ensure that improved financial insight is accessible to a large audience,” says Van Gurp. “And when we manage to reach people earlier on a large scale. We can then help them before they get into financial difficulties or before their choices become limited. As far as finances are concerned, I want to prevent that someone thinks, if only I’d....”
Boersma adds: “I’d be happy if people start seeking help with their financial affairs as a matter of course. It doesn’t need to be something you enjoy, but it should be just as regular a routine as a dentist appointment. Just go and see them once or twice a year. And we’ll be there, ready and willing to help.”