Today fintech company SAVR is launching Sweden’s first open fund platform, where all commissions are fully refunded to the customer.
Now any Swede with e-identification can choose freely from over 1 300 different funds and on average, only pay half the fund fee.
In connection to the digitalization of stockbroking in the early 2000s, there was a revolution in opportunities for fund savers when it came to choosing and saving in funds. After almost twenty years the development and competition have stalled. This has affected savers through high fund fees which have remained stable. When the European regulations MiFID 2 came into force in Sweden in 2018, fund commissions were expected to be completely banned. But instead, larger platforms have continued to push fund companies on higher commissions.
“We want to break up the current price cartel and create a free and open platform where people can own manage their funds. On today's platforms, you pay yearly commission fees by just having your money there. We are reversing the entire business model and only charge when we actually add value”, says Daniel Aarenstrup, CEO and founder of SAVR.
Sweden is not the only country where pricing is becoming more transparent and commission fees are starting to disappear. During the end of this year’s summer, the Norwegian bank Sbanken announced that they would cut fees on over 400 funds. In October, American online broker Charles Schwab also agreed to remove the brokerage on all stock transactions. For a long time, chargers to brokers and other middlemen resulting in eroded savings has been a well known concern. It is a question that has been raised by both politicians and consumers.
“Look at what is happening in Norway and the rest of Europe, where they have begun to repay commissions and adding 0.3-0.5% as a custody fee instead. It is basically the same business model but with a different label. SAVR only takes 0.09% as a custody fee. It has a completely different effect on both the customer and the entire industry”, continues Daniel Aarenstrup, CEO and founder of SAVR.
The majority of the 1 300 funds, now available for lower fees, also include funds of all of the four major Swedish banks. This, in addition to funds from the most popular independent fund managers. Platforms, like SAVR, can thus offer the banks' own funds to a cheaper price than what they offer themselves. Now, the positive effects of sound competition are coming into place, much awaited for and aimed at by new regulatory frameworks.