Competition in the funded pension management market after the entry of the investment management company “Vairo” can be considered healthy, but it would be good if one or two more new players appeared, Andrejs Martinovs, chairman of the board of the asset management company “INVL Asset Management”, told LETA in an interview.
He emphasized that it can be seen that customers are also responding to the arrival of new managers, as their movement between managers is increasing compared to previous years.
Martinov emphasized that it is also necessary to think about the fact that, from a regulatory point of view, the opportunity for new players to enter the market is preserved and that the requirements imposed on them are not discriminatory compared to those who have been operating on the market for a long time.
“It is clear that those who have been on the market for a long time have also developed a certain “fat layer” and they may not be as sensitive to changes in requirements as newcomers or potential newcomers. Let’s remember that we, who started working in pension management from the beginning, had completely different requirements than they are today. It can be felt that the Bank of Latvia is thinking about this and understands this need. However, there is always concern about the desire of politicians to interfere in the pension system and, let’s be frank, to damage its sustainability with various populist decisions,” said Martinov.
He said, however, that currently there is no such thing on the political agenda, but “from time to time, various stupid ideas are still heard”.
Martinov admitted that the situation in Latvia is bordering on unhealthy, when the two largest market players serve more than half of all members of the Latvian funded pension system. However, this should change as new players continue to enter the market offering new types of products.
“I have a feeling that there is currently a desire to fight for the big market participants to earn less. I think it would be more correct if the market share of the big players decreased, based on fair competition and market laws, not regulations,” said INVL Asset Management” chairman of the board, adding that there are rumors again that pension managers’ commissions are too high, but this may affect the entry of new players into the market.
Currently, pension plans funded in Latvia are managed by eight managers. The investment management company “Vairo” joined last year.
“INVL Asset Management” is a manager of alternative assets in the Baltic States and is part of the “Invalda INVL” group.
Tags: Expert desire politicians interfere pension system concern
