Ålandsbanken offers employees favorable share savings
Even the staff are being kept satisfied.
It’s in my own portfolio and I believe and trust that this will generate more discussion. Thanks to @Timo_Huhtamaki for the good points.
I strongly believe that ÅB’s bankers or asset managers are allowed to do their work without overly directive sales targets, which means index-tracking ETFs can be found in clients’ portfolios, as well as custody linked to asset management fees. Granted, with MIFID, investment advice for exchange-traded products is an art form of its own, but a client discussing cost-effective products will certainly get them into their portfolio. My own acquaintances have cost-effective solutions, short-term corporate bonds, and specifically this Nordic dividend strategy, both as funds and direct stocks via discretionary mandate.
The constant talk about cost-effectiveness and indices is a bit peculiar in this industry. If one’s thoughts are like @Dollarijanis’s, then one wouldn’t have a single bank/asset manager in their portfolio. That’s where the profits come from in the long run for the banks too, and the beauty of it is that market development simply helps AUM (Assets Under Management) and fee income grow. As for this mindset—I don’t deny that index investing is sensible for individuals or even at a foundation level. My own thought is that bonds belong in a portfolio—anything else is perhaps a bit of “magic,” like PE (Private Equity) funds etc., although these too have their own clientele. Not everyone can or wants to think “over time” about what is the most sensible or efficient way to invest. Not everyone wants their portfolio to dip as much as the index does. Not everyone drives a Corolla, even though it is absolutely much smarter than driving a Porsche.
I want to see the discussion in the board of a small or large company when the chairman suggests putting the entire cash reserve into the S&P 500 index at these valuations. It’s good to understand that a lot of money is invested in the world that isn’t there forever, or with a long horizon—or via monthly savings. There are many people who invest significant sums of OTHER people’s money (municipalities, foundations, associations, and companies). One shouldn’t just think about this in terms of how few great listed companies etc. there are in Finland. An asset manager like ÅB can offer broad retail banking services, and at the same time, a banker’s portfolio can accommodate a few machinery entrepreneurs, farmers, etc. Much of the costs are tax-deductible, and entrepreneurs, in particular, usually know how to value a service and product relatively highly. They don’t always sell their own things at the cheapest price either.
Things aren’t always done in the way that is absolutely most sensible or efficient. That’s why we have different services and companies in the world, and I can certainly name dozens of stupider ways to spend money than an asset management fee. Furthermore, as an entrepreneur, I aim to spend 100% of my own time on things other than making investment decisions. A bank or banker relationship also involves much more. You can even become friends with some. Sometimes a property or a buyer for a property is found through those channels. Business acquisitions have also been closed when the banker has been a mutual contact or acquaintance. That is what banking, asset management, and especially relationship management is. It doesn’t all happen on the index lists of Nordnet and Kvarn.