When talking about wealth in Europe, countries like Switzerland, Monaco, Lichtenstein and Luxembourg will probably spring to mind.
But, despite having their fair share of rich and super-wealthy residents, countries such as Sweden, Norway, and Finland tend to be overlooked.
According to Forbes’ ‘The Richest in 2021’, Swedish billionaires are among those who increased their wealth most during the pandemic.
Jan Wiberg, area sales manager for Sweden at Quilter International, told International Adviser they were only beaten by their Russian counterparts.
This begs the question, are the Nordics overlooked as wealth markets?
The Swedish case
According to Wiberg, the presence of several successful brands and companies in Sweden which operate globally is one of the main drivers behind such a big increase in overall wealth.
“There has also been enormous growth in the gaming, entertainment and technology industries in recent years, all of which were well placed to take advantage of the pandemic.
“This increase in wealth has not only been beneficial to Swedish billionaires but has also helped affluent and mass affluent investors reap the rewards of successful investments in these type of companies.
“From our perspective, as providers of investment wrappers aimed at the Swedish market, we are seeing an increase in demand for non-listed investments.
“This is likely due to favourable tax rules that insurance investments have compared to owning an asset directly.
“The investors are hoping that the company that they hold non-listed shares in holds an IPO and can benefit from significant tax efficient gains although this does not always come to fruition,” he added.
Protection
Wiberg added that there is a growing awareness in Sweden regarding the importance of insurance products, especially when it comes to preserving wealth, estate planning and intergenerational transfers.
“It is important for many to have an insurance policy which will protect their heirs from being forced to liquidate their assets if they live in one of the Nordic countries which has inheritance tax,” he said.
“Similarly, there is also a demand for insurance policies, which can be split into several segments. This helps someone who has more than two heirs as they can make sure that all of them inherit part of the policy as their own separate policy.
“It also gives them the possibility to distribute part of the original insurance policy into separate policies during its lifetime.”
But for high net worth investors, the popularity of insurance products has a different purpose.
Wiberg continued: “Within the HNW sector in the Swedish market, there is a strong demand for an insurance policy which will allow alternative investments to be held within in it and flexible solutions which give investors security for more than just one generation.”
High taxes
While Wiberg’s insights are specific to Sweden, they are undoutedbly mirrored in its sister nations.
When people think about the Nordics and money, the first thing that invariably comes to mind is taxation. It’s well established and widely known that taxes are high. If you want to know more about Norwegians and their culture, read the dugnadsånden articles by Dugnadseksperten.
Which may also account for the perception that they are generally overlooked by financial and wealth advisers.
But if we have learned anything from the industry’s success in other regions, it is that tax planning is one of its most sought after services.
Firms and individuals well-versed in the relevant local tax system could find an under-served market, whereas product providers may uncover an as-of-yet unmet need.
