Nordea: No more counseling solely on own products

The time for Scandinavian banking staff and portfolio pushers to offer counseling solely on their own products is at an end. There is a growing demand for counseling on external funds, and to avoid losing customers, these demands must be met. Nordea enters a collaboration with eight new preferred partners.

Nordea's Anne Buchardt.

In you have DKK 2-3 million (Approx. EUR 269,000-400,000) to spare, you will henceforth have access to investment counseling on 40 new external funds, provided that you are a customer of Nordea.

The largest Nordic bank has entered a partnership with eight global asset managers, bringing 40 new funds in total to Nordea's counseling sphere, says Nordea's Anne Buchardt in this interview with FW Asset Management.

The collaboration involves eight global asset managers (See list below), and the funds, which deal with equities, bonds, and alternative investments, are already being phased gradually into Nordea's counseling world on a group level.

"We have had many external asset managers in via White Label funds, but we see a growing demand from our customers for more options to invest in external funds based on our counseling, and naturally, we want to meet this demand," says Anne Buchardt, Head of Savings and Pension in Nordea Denmark, to FWAM.

In the beginning, counseling will be offered to customers of Nordea Private Banking, i.e. people with more than DKK 2-3 million in their accounts, but the plan aims to also extend the offer to so-called 'Premium' customers in retail.

"We view this as a strong trend that is here to stay, and we would like to reach as many customers as possible," says Buchardt.

The products are not on Nordea's product range for ornamental purposes. They are to be managed by investment counselors as though they were Nordea's own. Financially, the sales of external funds are equally as attractive as Nordea's own:

"We profit from the products that we provide counseling for. When we receive commission from the funds that we counsel on, we have to meet requirements for quality enhancing services. This is our choicest type of investment counseling, and we are even expanding access to it. So we definitely stand by the claim that we provide good, quality-enhancing services to our customers," says Buchardt.

Clear and accessible information on costs

On the same note, Buchardt assures that "for customers, information on the nature of expenses in the different funds will be clear and easily accessible".

Nordea's customers will see a particularly broadened horizon in alternative investments – a field that can otherwise be difficult for private investors to enter. But through the new funds, it will be possible to invest in e.g. infrastructure, property, forests, and energy.

However, the new range of external options is not the place to come looking for a strong ESG profile. The funds have been selected with a view to diversification and returns, not for their ESG profiles. Nordea has their own products for that purpose.

"In Nordea, we are very far ahead with ESG in Asset Management, for example in our Star funds. We are well advanced with those on a European scale, so in my opinion, we have some very favorable options ourselves," says Buchardt.

Rival bank Danske Bank has chosen a different approach, says Sune Worm Mortensen, Global Head of Wealth Offerings:

"We are going all out. This means that we screen the entire market, and then choose the best man for the job. We are the best at some things ourselves, while external managers do other things better than we can. But we counsel customers on external managers. Also on products that do not bear our name," says Worm Mortensen. He goes on to emphasize Danske Bank's belief that the most unbiased and transparent approach to investment products is to have full access to the market, not just to a small selection of partners.

Nordea has already introduced the first funds, and the remaining will be phased in during this year.

English Edit: Marie Honoré

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