Folksam benefits from independent thought
Göran Emtesjö at Sweden’s Folksam says independence is a key trait of the selection process.
Folksam is one of Sweden’s biggest insurers and asset managers, with about SEK280bn (€32.5bn) under management, particularly on behalf of long-term savers in pensions.
The company’s roots in the early 20th Century and continued mutuality mean it takes a particular ethical, social and governance approach both in terms of its own business structure, but also in terms of the investments it makes on behalf of customers.
Göran Emtesjö (pictured), senior adviser, Partneraffär Finans, is responsible for selecting funds offered to customers via mechanisms such as its online portal. He also works closely with intermediaries, as many of the funds handled by Folksam involve long-term savings, which may involve regulated point of sale/distribution, as well as different types and frequency of inflows.
This in turn impacts on discussions Emtesjö has with manufacturers over rebates and levels of management charges – both up front and trail.One of the key advantages Folksam has, he says, is the independence with which it can select funds.
Unlike a number of domestic competitors, particularly banks with their own fund manufacturing capabilities, Folksam is under no pressure to make recommendations about its own products, Emtesjö argues.
The other key differentiator is the relationship with intermediaries in the distribution process, such as Söderberg & Partners, and how that affects the roughly 300 funds which he says are selected at any one time. The amount of AUM impacted by this type of distribution activities is about SEK20bn.
“We are independent. We don’t have to take account of any of our own funds that need feeding. And we sit down with distribution to discuss how they want to tailor things. I think that is where our success lies,” he says.
Remembering the end customer is paramount for continued success, he suggests. If an intermediary is selling an insurance contract that involves saving into funds, then it is, relatively speaking, not that interesting to the customer what it says on the insurance documents. The important thing is where the money is, that there is a decent portfolio of funds, and tools to hand, he says.