Before the 1970s, there was no retirement industry. Before the 1950s, not even employers had retirement plans: These emerged, ironically, as a way for companies to circumvent salary controls in the post-war period. Neither was the life insurance industry a “savings” industry; It was focussed simply on mortality-risk sharing and risk-spreading.
Within less than 40 years, the industry now controls USD 40trn, enough assets to buy all listed companies, plus all government debt in Europe, twice!
It has become an industry which is exceptionally fragmented by different national laws, and burdened by its own size, and structurally unable to adapt to changing capital market environments.
Governments are stretched like never before in peacetime by a combination of deleterious demographic trends and national debt levels, and unprecedented experiments in monetary policy are unfolding right now to gloss over a massive structural problem. And yet, against this backdrop, the vast majority of consumers are not saving enough, and those few who do are uncertain of that fact. Distribution of retirement products still follows an old-economy script, ossified by entrenched and massive organisational structures.
Enter the new economy: On the one hand, people change jobs a dozen times and change country several times during their career. They are empowered to shop around like never before. Yet, on the other hand, they are more confused and scared about the options, the laws, and their own rapidly changing needs, when it comes to planning for their retirement, and twenty years into their career they have often lost control over how many retirement plans they have and where these are located exactly.
What it amounts to then is a massive space of opportunity for disruptive business models to re-shape things from outside the established behemoths.