After 14 years at Principal, Luis Lozano, a champion of open architecture, joined Valmex in February 2021. Since then, the institutional-investments head has been working to enhance the pension segment of Valmex’s business, as he told Fund Pro Latin America in an exclusive interview.
“It is necessary to develop the voluntary pension market, especially for those with higher income who are not fully covered under the traditional and obligatory pension market (via the Afores). In this segment, replacement rates are simply unacceptable,” he said.
Lozano and his five-person team are targeting private-pension plans in Mexico, which he acknowledges “have grown very little the last few years, but have a huge potential, which we can exploit with great products and services.”
Valmex currently has about 560 pension plans serving over 150 companies, including some of Mexico’s most relevant ones, said Lozano. “Our focus is to grow this segment, which is very important, and many times overlooked. We want to be an active component and the more people we can cover, the better.”
According to him, companies interested in private pension plans ask for: “Efficient investment products that are solid and competitive; a robust operating partner that reduces the administrative burden of operating these plans; and outstanding service, both on the education and communication front, including fiscal expertise.”
For Lozano, the main challenge is to adapt the plans’ structures to regulatory changes, like the possible fiscal reform, and the recent labor one. “Regulation has a huge role in the growth of this segment, and this industry.”
“Our biggest wish is to grow private pensions through a joint effort between companies, financial firms, and the government, with everything that implies from a regulatory standpoint,” he said
The firm’s brokerage arm makes all of Valmex’s funds – as well as any third-party products on its platform – available to their clients. “The fund operator at Valmex has very good local management and global partnerships, which include subadvisory deals with firms such as Vanguard, JPMorgan, Mirova, EDM, and Brandes Investment Partners.”
Its flagship funds are the Proviva family, a life-cycle series of funds launched in 2019 and subadvised by Vanguard. “We offer the market a deep knowledge of local regulation and the private pension-plan market alongside one of the most renowned asset managers in the world.” With this, the glide path is one “very much focused on the Mexican market, not the general one, but the one with access to a PPP, with a proper segmentation for the public it targets.”
According to Lozano, whenever the client has further needs is when other funds come in to complement the investment strategy. “We know that we cannot be good at everything, so we focus on what we are very good at, and on areas where we lack, we ally ourselves with those who are very good at it. Our philosophy is one of openness and sharing experiences with people from whom we can learn from.”
On the service front, Valmex offers a broad catalog of courses, talks and informational materials, including particular assessments. Lozano also claims to have one of the highest registry individualization platforms and just launched its mobile App, which allows clients to access their savings products 24/7. Both for Android and iOS. “In this first phase, it is focused on information about your accounts, and the chance to request loans, but phase two will also include more tools and the chance to have real time communications with customer support,” he concluded.
Related Posts
