SWEDEN - Linder & Partner, an investment consultant and adviser, has reported Handelsbanken Liv, the life and pensions arm of the Swedish banking group, to Finansinspektionen, the country's regulator.
Handelsbanken has urged its clients to switch from a guaranteed product to a fund solution, and Linder & Partner argues that, by switching from traditional pensions products with high guaranteed returns to funds, Handelsbanken is looking after its own interests, rather than those of clients.
The regulator is looking into the matter.
Göran Holgerson, chief executive at Handelsbanken Liv, argues that it can be advantageous for clients to select fund products instead of the traditional pensions insurance products that carry a guarantee due to the way Handelsbanken's guarantees are set up.
Handelsbanken's guarantees are annual, rather than being calculated once the pension insurance has been cashed in.
Holgerson said this meant Handelsbanken was restricted to manage long-term assets with a very short investment horizon, which limited the strategies it could adopt.
He also said customers were offered not only Handelsbanken's fund solutions but also competitors' fund and traditional guaranteed pension products.
In other news, the Swedish government has set up an inquiry into the future of the AP funds.
The government is currently working on a directive to look into the rules governing the AP funds.
Peter Norman, minister for financial markets and a former head of AP7, said now was a good time to assess what had worked well and what had not with the AP funds, being as a decade had passed since their creation.
Separately, the Swedish government, in its annual evaluation, criticised the high level of salaries for AP fund directors.
The funds' internal auditors evaluated remuneration contracts and determined that they followed government guidelines, insofar as they were "reasonable", "competitive", contributed to good ethics and corporate culture and were not near the top of Sweden's salary league tables.
However, the auditors said they have found it difficult to document adherence to the guidelines, something the government sees as a "serious" problem.
The government is also unhappy with the way the AP funds voted on the issue of bonuses in companies they own.
Instead of towing the government anti-bonus line, the funds approved controversial programmes in many cases.
The Swedish government cannot interfere with how the AP funds vote, as the laws governing the funds state clearly that they must act in ways that maximise returns.