Another (possible) scandal hits PPM in Sweden

Countering statements are being made today in Sweden by, on the one hand, one of the biggest daily newspapers about hidden charges of up to SEK100m (€10m) that may have not been properly accounted for, and on the other hand a statement from fund provider Solidar that the imputations by Svenska Dagbladet are wrong.

The issue relates to funds available on the PPM platform operated by the Swedish Pensions Agency, through which users can self-select into which funds they want a portion of their legally mandated and obligatory pensions savings to be invested. A default fund – AP7 – exists for those who do not wish to make choices.

Because of the scope of PPM – every employed person in Sweden has some engagement because of the prevailing pensions regime – the platform negotiates significant rebates on behalf of its users, which they can reinvest to boost ongoing total return. The gist of the SvD article is that certain charges have not been audited/reported by Solidar – a provider of fund based pension savings and investment advice as well as insurance – to PPM, thereby retaining money for itself.

Solidar’s group CEO Roland Johansson has been quick to respond via a question and answer format statement put out on the firm’s website, in which he dissects the accusations and refutes them (see full statement in Swedish further below).

He notes that SvD has “repeatedly put the same question to us over a six month period; whether there are fund charges that have not been accounted for with the Pensions Agency.”

“And we have answered what is in place: there are no charges that Solidar should account for that have not been reported to the Pensions Agency. All charges that should be accounted for have been reported and rebated in line with the working agreement with the authority. Our savers have received the rebates they are entitled to.”

He added: “There are no grounds at all for such a statement [that Solidar could have earned up to SEK100m]. SvD is insinuating things in its article that we do not at all recognise.”

Johansson goes on to note that when the newspaper first started asking the question about charges and rebates, Solidar engaged its own investigation, and he said that the result of this is that Solidar has concluded it did not do anything wrong in the way it has been reporting to the Pensions Agency.

In respect of Lantern Structured Asset Management, which manages the funds affected by the allegations, Johannson said that Solidar has followed the relevant investments over time and can find no fault. Lantern is part of the UBS group, and Johansson said that UBS’ funds undergo annual auditing in the same way that Swedish funds and fund providers do.

Overall, Johannson said the allegations “did not feel good at all”.

“Solidar is my life’s work. Since the start in 2003 we have been driven by wanting to manage our savers’ money well. During our journey we have certainly made mistakes and not always picked the best route, but generally it has gone well for both ourselves and our savers. We are taking very seriously the information that suggests our customers should feel cheated or misled.”

PPM undermined?

This latest question mark over the PPM platform and standards upheld by fund providers using it to distribute their funds comes after a year of scandal hitting this part of the Swedish funds market.

It is only days since the Pensions Agency itself in a blogg noted that a year had passed since it referred Falcon Funds to Swedish police, on the basis of up to SEK2.4bn of assets belonging to some 22,000 long term savers being in danger. That was followed by the even more serious allegation that some SEK19bn of assets belonging to some 130,000 savers using funds provided by Allra were in danger. InvestmentEurope has reported on both issues over the past year.

So far, there are no indications that access to Solidar’s funds on PPM are being restricted by the Pensions Agency. They are still visible via the search function on the platform.

Allra update: Scope of remands widens

After Falcon Funds – Big PPM changes expected by June

Full statement from Solidar in Swedish:

Svenska Dagbladet skriver att ni har underlåtit att redovisa avgifter till Pensionsmyndigheten för att på så sätt tjäna pengar, stämmer det?

– Nej, det stämmer inte. Svenska Dagbladet har återkommande ställt samma fråga till oss under ett halvårs tid – om det har funnits fondavgifter som inte har redovisats till Pensionsmyndigheten. Och vi har svarat vad det är som gäller: Det finns inga avgifter som Solidar ska redovisa som inte har rapporterats till Pensionsmyndigheten. Samtliga avgifter som ska redovisas har rapporterats och rabatterats enligt samarbetsavtalet med myndigheten. Våra sparare har fått de rabatter de har rätt till.

Det skrivs att ni ”kan ha tjänat upp till 100 miljoner kronor”. Stämmer det?

– Nej, det finns ingen grund överhuvudtaget för ett sådant påstående. SvD insinuerar saker i artikeln som vi inte alls känner igen oss i.

Du menar att Solidar utpekas felaktigt?

– Ja, i samband med att SvD började ställa frågan för ett halvår sedan har vi naturligtvis undersökt saken internt för att vara helt säkra på vår sak. Det finns inget som tyder på att vi skulle ha gjort felaktiga rapporteringar till Pensionsmyndigheten.

– Samarbetsavtalet med Pensionsmyndigheten ser ut så här: Årlig avgift är det som rapporteras till Pensionsmyndigheten och den som rabatteras till andelsägarna. Detta har vi gjort, helt enligt reglerna, och våra sparare har alltså fått den rabatt de har rätt till.

Men SvD skriver att avgifter kan ha dolts i förvaltaren Lanterns redovisning?

– Vi har självklart följt upp investeringarna löpande och inte kunnat se något fel. Vi har ingen anledning att tro att förvaltaren Lantern Structured Asset Management skulle ha tagit ut onormalt höga kostnader eller redovisat något fel. UBS som äger Lantern är ju ett av världens största finansiella institut och deras fonder revideras årligen av revisorer på samma sätt som svenska fonder och bolag revideras.

Men varifrån har SvD då fått de här uppgifterna?

– Det måste SvD svara på. Vi känner inte till vilken information SvD:s källor har, men uppgifterna i artikeln om hur vi ska ha arbetat stämmer alltså inte. Vi har följt det regelverk som gäller till punkt och pricka. Om SvD har information som belägger påståendet från källor att vi skulle ha agerat fel, så uppmanar vi tidningen att presentera den informationen. Vi har gått igenom detta noggrant och enligt våra uppgifter har Solidar inte redovisat några avgifter felaktigt.

Hur känns det för dig att SvD pekar ut Solidar som “skurkar”?

– Det är förstås inte roligt alls. Solidar är mitt livsverk. Sedan starten 2003 har vi drivits av att vi vill förvalta våra sparares pengar väl. Under vår resa har vi säkert gjort misstag och inte alltid valt den bästa vägen men generellt har det gått bra för både oss och våra sparare. Vi ser mycket allvarligt på uppgifterna som låter påskina att våra kunder borde känna sig lurade eller vilseledda.

 

ABOUT THE AUTHOR
Jonathan Boyd
Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope. Jonathan has over two decades of media experience in Japan, Australia, Canada and the UK. Over the past 16 years he has been based in London writing about funds and investments . From editing the newsletter of the Swedish Chamber of Commerce in Japan in the 1990s he now focuses on Nordic markets for InvestmentEurope.

Read more from Jonathan Boyd

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