In Spain it seems that a new process of bank mergers is being developed with the operations of CaixaBank and Bankia or the possible merger between Liberbank and Unicaja, after the failed absorption of Sabadell by BBVA. Does this process have any effect on neobanks? What role do they play in it?
Banking concentration is undoubtedly an opportunity for the little ones for a reason: what we are going to see is how fewer players will remain and calling customer service will be relatively simple. In addition, the capacity for movement and innovation in small and medium-sized companies is a necessity for survival and Darwin already said that the one with the greatest adaptation to change will survive. I do believe that it is an opportunity for us. If we look at how the panorama is right now, many groups already commented on the increase in rates in those incumbentsNeobanks in general have the philosophy of not charging for having a client account or a card and it is something that we are maintaining over time, so from that point of view it will also be easy to attract new clients. At MyInvestors we also have a 1% remunerated account for the first 15,000 euros which, as the rates are, is also an opportunity.
The coronavirus has highlighted the importance of technology in all areas of life. Has technology also seen a boost in financial products?
Digitization has reached all sectors with force. Obviously in ours it has been greater. We have managed to reach sectors of the population that were not previously so linked to “digital banking” and above all, this digitization has a positive point, which is the attraction of customers to purchase by mobile phones and devices. But this also has a negative point: and it is that we have accustomed people to buy everything with a click and they are trying to demand that experience in financial products, which is much more complex and we are going to see how the regulation is adjusted to be able to deliver those products and services to the end customer. Therefore, the SandBok is very important to serve these products. It is impressive to see the clicks to open a checking account and the clicks to open new business models. This must be taken to the hiring of funds, pension plans and even alternative product where there is an important point of innovation. In addition, what this pandemic has taught us is to worry about our savings and try to maximize it. Due to this, the products most related to the indexed world have had a very strong growth in Spain. Now with technology it is so easy to compare an ISIN or the commissions of the funds that there has been a certain revolution.
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At the end of 2020, what assessment do you make of the behavior of passive management in a year marked by the covid-19 pandemic with significant ups and downs for the markets?
Thanks to financial education and interest, people have had more time to worry and have realized that the indexed product (indexed funds, plans or portfolios) really was a product that they did not have in their portfolio and that is interesting because In the end, the world of indexes brings together the three most important things that consumers demand today: low cost, speed and ease of use. In the end, the indexed product is easy to explain to the client because you replicate the behavior of an asset minus the commissions, which are also much lower than any active management product. With what there you have an extra profitability just because of a lower commission. In fact, the client is even approaching indexed portfolios that involve signing a management contract.
Indexed pension plans are still not as popular as index funds. For what is this? What are your advantages and disadvantages compared to index funds for long-term savings?
I think this goes a lot with the concern that we have had regarding financial education, which is one of the great drivers. When you talk to clients, it is surprising that there are many pension plan clients who are unaware that they can make their pension plan portfolio different. Many times we have thought that the plan was linked to the company but there is a world of pension plans. It is true that it is not as extensive as that of investment funds, because management commissions have a maximum rate of 1.25%, but at MyInvestor we have more than 80 pension plans. A good plan can be the same as a good fund but perhaps we have not gotten as close to the plans as we have done with mutual funds. I recommend that investors consider this diversification in pension plans and look for the open architecture. In the top 10 of Spain are three of the largest incumbents of this country in these active management pension plans, so I invite you to investigate the world of active management.
Could subrogation of the mortgage also be a savings method? What is the best time to do it?
At MyInvestor we are aware that investment, for many investors, is their mortgage. In addition, thanks to the new laws that entered on mortgages, people can subrogate their mortgage, that is, they can transfer their mortgage from banks without any burden. To get an idea, the mortgages signed between 2000 and 2017, if we made the subrogation with the rates that we all have, it would imply a saving of almost 20,000 euros, so doing that subrogation also implies an improvement in our savings. And in MyInvestor that we advocate not forcing, we have the “Mortgage Without a backpack” in which we do not force to contract other products. We even have the commitment that those insurance linked to the mortgage would improve its price. With it is a way to save too. Of the more than 1000 mortgages that we have signed, almost 75% are only subrogation.
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