Asset management instead of low interest rates: Advisors are becoming increasingly important in finding the right opportunities for small investors
Luxembourg, 13 July 2021 – In times of low interest rates and rising inflation, it is becoming increasingly difficult to find good investments for smaller assets: “There are hardly any solutions left for savings account holders, because even many fund-based asset management companies require a certain minimum investment”, said Swen Köster, Senior Vice President at Moventum S.C.A. “This makes it all the more important to have a good advisor at your side.”
Penalty interest, negative interest, minus interest or custody fees. Whatever they are called, ever more banks and savings banks are deducting fees from ever smaller amounts held in savings accounts. At the beginning of July, several credit institutions in Germany charged their customers negative interest starting from 25,000 euros. Meanwhile, comparison portal Verivox shows that even smaller amounts are not spared any longer: 16 financial institutions are already charging minus interest starting from account totals of 10,000 euros and four institutions are already doing so starting from 5,000 euros at present. And the list includes not only relatively unknown financial institutions, but savings banks and cooperative banks, where average wage earners are depositing their savings. And not by a small margin either, because according to a study by Postbank, savings accounts continue to be the most popular form of investment among Germans at 53 per cent, immediately followed by checking accounts at 34 per cent.
If you are backing the right investment “horse”, you are well positioned, but where are people supposed to put their savings? “For small amounts, there are hardly any asset management solutions on an investment fund basis available”, Köster pointed out. The real loss of purchasing power currently suffered by savings account holders further exacerbates the problem: “In the wake of rising inflation, even more available capital is being lost along with the deposit fees”, said Köster. Bank customers are therefore well advised to consider how funds on their checking or call money accounts can be invested more profitably.
Those who are turning to advisors are better off. “Well-versed advisors know which asset management firms will accept clients with amounts at which the banks start charging fees”, Köster explained. Advisors have the important task of working with individual customers to determine suitable strategies and risk classes. “Anyone who has had their money in a call account up to now does not suddenly want to speculate in highly volatile stocks”, said Köster. It helps to find a healthy balance between return and risk.
Additional information is available at www.moventum.lu