​Swedish Roundup: €3.3m Fine For Avanza Pension

Swedish pension provider Avanza Pension has been fined SEK35m (€3.3m) by the country’s Financial Supervisory Authority (FSA) for failing to comply with reporting rules relating to its solvency ratio.

The regulator said that following a investigation into the company – a subsidiary of financial group Avanza – concerning activity between January 2016 and July 2018, it had given Avanza Pension a warning for “insufficient management of technical provisions and reporting” and levied a SEK35m fine.

The watchdog said: “The rule violations have, among other things, led to the overall value of the company’s provisions becoming too low.”

The Swedish FSA added that “consumer protection has thus been impaired”, and Avanza’s management “may also have had an overly optimistic view of the company’s future earnings potential”.

The probe revealed errors in Avanza Pension’s reporting, and found that the company had not drawn up and followed necessary policy documents.

Since the company’s provisions had been undervalued, the firm’s board and management – along with the regulator – had lacked knowledge about the company’s actual solvency situation.

“This has meant a weakening of consumer protection,” the FSA said.

However, it said Avanza Pension had now initiated a major process to rectify the shortcomings. Avanza Pension acknowledged the failings but asserted that these had never entailed any risk for its customers.

Rikard Josefson, chief executive of Avanza and chairman of Avanza Pension, said that, since Solvency II regulations had come into force, the firm had strengthened its internal governance and control functions.

“The sanction from the Swedish FSA is a sign that this work has gone too slowly,” he said.

Mercer enters Swedish asset management market

Consultancy giant Mercer has launched its first investment fund for pension schemes in Sweden – an “all-weather” multi-asset fund called Mercer Advantage Balanced Growth.

The new fund combines asset classes including Swedish equities, global equities, corporate bonds and mortgage bonds.

Oscar Lekander, sales director at Mercer Sweden, said many Swedes felt under stress about their future financial situation – potentially due to individuals having increasing responsibility for their pensions.

If people were were not interested in this area and did not understand it, this could create concern, he said.

“Therefore, we are very pleased to launch a pension fund that has been created for our customers and their employees as a good alternative for stable growth with a reasonable level of risk, and at a good price,” Lekander said.

Car seat manufacturer Adient is one of the first clients to choose the new fund. Tony Malila, vice president at Adient Sweden, said: “Mercer Advantage Balanced Growth fits our criteria as it is a fund with good returns and low costs and it also has a risk level that appeals to many.”