Sweden’s government has asked the Swedish Pensions Agency (Pensionsmyndigheten) to improve consumer protection on its fund supermarket platform – PPM – the country’s largest.
This is likely to result in stricter requirements placed on providers of funds and the products themselves being placed on the platform. The requirements come following a number of cases of long term savers losing out to the activities of intermediaries that have effectively fleeced retail investors.
The Swedish Investment Fund Association said it welcomed the government’s request of the Agency, as well as regulations that have been brought in to require written approval from customers following telesales of funds/switches and concerns raised over funds from foreign providers. However, the Association added that it thought there is more work to be done by the Swedish Financial Supervisory Authority (Finansinspektionen) in ensuring proper oversight of fund providers from overseas, as well as financial professionals active in the Swedish market.
The PPM platform otherwise is seen as a positive system for long term savers looking to make active fund choices. The Association said that year-to-date, the average return from funds on the platform stood at 6.4%, against the 2.8% return from the country’s public pension.
Another area that is in focus when it comes to PPM developments is sustainability. The Pensions Agency recently noted that it is tackling the sustainability issue on multiple fronts, with an eye to making the platform itself more sustainable, while also contributing to the development of clearer labeling of funds as meeting sustainability targets.
Current sustainability labeling of funds on the PPM platform lack reference to governance, and are historically focused on environmental and social targets. However, the Agency is set to work with Swesif, the Swedish sustainability investment forum, in developing a sustainability profiling method, which will then be applied to funds and fund companies represented on the PPM platform.
Once in place, funds will be labeled using the new method and the existing method will be phased out.
The labeling will affect more than 800 funds on the platform, which in 2015 negotiated some SEK4.2bn (€432m) in rebates to some 7 million savers and pensioners.