A third of Swedes engage in self-selection of funds as retail fund customers, according to findings of the latest biennial fund savings research published by the Swedish Investment Fund Association.
The findings are based on a survey based on a sample of 1,500 randomly selected Swedish taxpayers aged 18-76, with the research carried out by TNS Sifo between March-April 2016.
On the key question of how funds were selected for private savings, 33% said they “searched actively themselves” across all age groups and genders.
The most popular route to funds remains “recommendation of adviser/broker” (54%), with “recommendation from acquaintance/family” (24%) the third most used route to deciding which funds to buy.
And fund manufacturers are likely to be interested in these findings because of the sums involved. According to the survey some 32% of respondents save more than SEK2,000 (€206) monthly via a standing order. A further 27% save between SEK1,000-1,999 (€103-206) on this basis monthly.
The total value of investments in funds is over SEK250,000 (€25,819) for 28% of respondents, with 22% answering in the range of SEK100,000 to SEK249,000 (€10,327-25,712).
When it comes to switching funds, the survey found that 34% did so because they were dissatisfied with the performance of their existing fund.
However, when looking for a new fund, it was the fees that came top among reasons why it would be considered (54%) with risk level (47%) as the second most important factor. Historical performance was picked by just 27% as “very important”.
Also, Swedes showed themselves a mixed bunch when the question of fees pre-purchase was queried. The survey asked retail investors whether they looked at fees before buying funds, but 35% said “no”, while fewer, 32%, said “yes, always”. 22% answers “yes, sometimes”.
Also a whopping 74% said they did not know if fees are subtracted from the cost of buying a fund.
On the question of seeking advice, 58% said they did not see any change in the advice requirements.
For fund providers offering sustainability driven strategies, the survey holds both good and less good news: 48% of those selecting a sustainability fund did so because they felt it would have a “positive influence”, but of the overall sample size just 23% said they had picked a sustainability fund.
The survey has also found that of those that have the ability to make choices in their workplace pensions, some two-thirds, 63% are self-selecting.
Nearly half, 48% of those surveyed also said that they were using funds to engage in private pensions savings
Self-selection was also widely used for funds within the PPM (Premium Pension) system. There, 47% said they engaged in selection of funds rather than just rely on the default fund.
In light of the proposals recently published by the Swedish government that critics have said could undermine choice in the PPM system, the Survey found that 63% of respondents favour the ability to self-select. The government proposals were published after the survey interviews were done earlier this year.
However, the survey also found that 84% of respondents did not know about the rebates available via the PPM system, in which a funds platform is operated by the Swedish Pensions Agency.
Click here to read the full report (in Swedish): http://fondbolagen.se/PageFiles/7729/Fondspararundersokning%202016_Prospera_Fondbolagens_forening.pdf