Hallgeir Kvadsheim was shocked by the change to the Sparebanken jacket.
– That’s meat, right, sparebankenvest? Will you have a 0.7 percent brokerage fee for index funds as of October 1? Quadsheim says I say I misunderstood Twitter.
new Requirements from the authorities in 2018 It causes banks to make changes to savers. Kvadsheim explains that fund companies now split costs into two prices, showing customers what they’re paying for.
One is the management fee and the other is the publishing fee – or platform fee. He explains that those who offer a platform to save money should have funds for marketing, reporting to authorities and the like.
What are the publishing fees / platform fees?
- When you save money, you pay an annual management fee to the fund manager. Distributors, i.e., banks, previously received a portion of this fee as return commission.
- Return commission is now called a brokerage fee or platform fee, and is intended to cover services such as distribution, marketing, customer service, tax reporting, guidance and advice.
- Both international regulations and the authorities in Norway want a clearer distinction between the costs borne by the producer and the distributor. This is because those with a platform to buy and sell money must document that the pay they receive improves the quality of service.
- Therefore, more people are choosing to charge the platform, which makes it clear what you are paying for.
Source: Jorge B. Jensen, Consumer Council, and Sparebanken سترة jacket
The split has lowered the cost of some funds, but they are primarily active funds. Index funds are partially becoming more expensive both at Sparebanken Vest and a number of other banks, Kvadsheim explains to Nettavisen.
However, the level of brokerage fees is what Kvadsheim responds to, because it is determined by the banks themselves.
Most of them own 0.3 percent. So 0.7 percent of index funds shocked me. He points out that they fully praise themselves The new change of Sparebanken Vest.
With publishing fees and management fees it smells almost one percent. He points out that this is a lot for an index fund.
After Nettavisen contacted Sparebanken Vest on Friday morning, the brokerage fee was lowered. See their answer further down in the issue.
Signal not to buy
Kvadsheim says he can somewhat understand that banks want to charge a fee for managing the index, but he believes they should look at market competition when they choose what level they are at.
If others take half of what you take for the same job, you have to put your finger in the ground. It’s a signal to clients that it’s not wise to buy index funds through Sparebanken Vest, he says.
Several have commented on Kvadsheim’s post on Twitter, and when someone points out that the reason is the new demands from the authorities, Kvadsheim replies:
– Yes, but the authorities do not decide the level of fees. The bank charges 0.06 percent for index funds, and many banks charge 0.3 percent. But with 0.7 percent, you lose yourself. Moreover, not all banks offered this, neither Nordea nor Storebrand/Skagen for example. But they may come.
These are the platform fees / brokerage fees at some of the largest banks:
- nordnet Has up to 0.30 percent
Sparebank 1 SR-bank informs Nettavisen that it charges between 0.20 and 0.40, all based on the investment amount
- Banks It has an annual rate of 0.06% for index funds
- in a DNB There are varying platform fees depending on the size of the stake you have in the option to invest on funds:
0.15 percent platform fee on funds from zero to 20 percent equity
– 0.20 percent platform fee on funds from 20 to 80 percent equity
– 0.30% platform fee on funds from 80 to 100% shares
- Sparebank 1 Nord-Norge charges 0.30 per cent if you have less than one million kroner, 0.25 per cent if you have one to ten million and 0.20 per cent if you have more than ten million kroner, Nettavisen is notified.
- Danske Bank tells Nettavisen that they have no platform fees, and there is no separate trading platform yet.
– Only the customer can be charged
Jorge B. Jensen, director of finance at the Consumer Council, says Finanstilsynet has been patient and allowed players to adapt after the new regulations (MiFID) came into effect.
Now, however, players are starting to make changes.
– Jensen says the main rule now is that money distributors can only receive payments from customers, not from the manufacturer.
Previously, banks were eager to distribute money that gave them high-yield commissions, because it would provide them with more income — no matter what was in the best interest of the customer, he explains.
With the new rules and changes many banks are now making, it will be easier for customers to opt out of the most expensive distributors.
– Our surveys show that the vast majority of consumers buy money via online self-service solutions, and have no contact with distributors afterwards. So why should you pay for tips you don’t use? Asked.
– If you buy index funds via online services, you are not in contact with the distributor. Why should one pay so much then? Asked.
Even if the banks have to charge a platform fee or brokerage fee, they decide the level themselves.
– 0.7 percent is too high. You put yourself at a disadvantage in the competition by getting high publishing fees, Jensen says.
– The bank has chosen to charge high platform fees when we compare prices with other distributors. It also means index funds, which are good, disgusting fund products recommended to consumers, are becoming less attractive, says Jensen.
He points out that surprisingly, such a large and well-established player as Sparebanken Vest should have much higher brokerage outlays than others.
“Fortunately for consumers, it’s possible to buy fairly public index funds from elsewhere at a cheaper rate,” Jensen says.
On Friday afternoon, Sparebanken notified Vest Nettavisen that based on all feedback on brokerage fees, they are making a change.
– Based on feedback from clients, we have re-evaluated our pricing model and now have changed the price category for index funds. The variable price category means the rate is reduced to 0.35 percent in brokerage fees, Morten Ohhmeh, head of savings and investment at Sparebanken Vest, tells Nettavisen.
What is the reason for your 0.7 percent rise in the first place?
– Our assessment when we set the original price was that the bank has the same process towards the customer, and at the same distributor cost, as for common stock and index funds. Therefore, the two ended up in the same price category, he answers.
He adds that they received a number of reactions after they reported on their new pricing model.
– Customers contacted us and thought the price was too high. At the same time, clients have said they want to get their placements with us because they like to invest in local advisors and an extensive distribution network, says Oehme, who points out that it’s important for them to listen to clients.
He says Sparebanken Vest takes care of being a good advisor to its clients.
“We see that clients appreciate that we have an extensive office network with skilled consultants as well as good digital services,” he says.
Only after Nettavisen contacted Sparebanken Vest did they do it Quadsheim replied On his Twitter post they are lowering brokerage fees.
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