Tuleva was fined for violating communication rules. The Financial Inspection, which imposed the fine, accused us of using two sentences in our July Facebook ads: “Keep the profitability of your pension assets” and “The only one with honest statistics.” Additionally, FI found that we had omitted mandatory disclaimers from some advertisements. (1)
FI considered the phrase “Preserve the productivity of your pension assets” as a promise that the returns in Tuleva are guaranteed. This was certainly not our intention. We communicate directly and straightforwardly about Tuleva, and if we had wanted to say that returns are guaranteed, we would have said so plainly. Since the beginning, we have emphasized that the surest way to achieve good returns is by keeping as much of the return on your assets for yourself, rather than paying fees to the bank. Instead of guaranteeing apparent returns, we emphasize that your returns are unlikely to move steadily upward.
However, understanding our texts occurs through the eyes of the reader, not the speaker. We need to test our texts and designs more effectively to avoid any misunderstandings.
FI found the advertisement “The only honest statistics” misleading. The issue was not the content of the advertisement – in my opinion, no other fund manager today shows the returns earned by individuals in their pension funds in a comprehensible way per annum basis. We were criticized for not providing a clear explanation in the advertisement for why it is considered “the only honest statistics.”
We need to continue working on the methodology for displaying returns. When Tuleva started, we were the only ones honestly discussing fees and including all costs in the fund’s fees. Others did not do this until the law and the Financial Inspection obligated them to do so. Similarly, we now need to achieve the same with displaying returns: ensuring that every saver first sees their personalized return on an annual basis, not some arbitrary period’s change in share price or a return figure that does not consider how many years a person has been saving.
Our goal is to improve pension savings in Estonia.
This goal is even enshrined in our articles of association: to contribute through communication activities so that saving becomes a simpler and more understandable activity for everyone in Estonia. But we do not operate in a vacuum. The financial sector constantly releases a large amount of information that hinders decision-making.
The extensive decision by the Financial Inspection is an important starting point for setting our activity goals. Over the next two weeks, I will systematically explain in a blog series the issues we are addressing with our communication, the rules we were deemed to have violated according to FI, what we can improve ourselves, and what regulations or practices need to be changed to truly make saving better and easier for people.
I am very grateful to many Tuleva members who have already offered their advice and support. If you have any questions, feel free to contact us at [email protected] or call us at 644 5100.
(1) You can find the Financial Inspection’s announcement regarding the decision here (in Estonian). The fine is the fund manager’s cost and does not affect savers in pension funds. We have grown so much by now that this substantial 100,000-euro fine does not hinder or slow down our operations. Nevertheless, we are considering appealing the decision and will decide in the coming weeks.