Banks' Sales of Their Own Funds

Banks' Sales of Their Own Funds Report May 2026

Banks' Sales of Their Own Funds 2 Table of Contents Banks' Sales of Their Own Funds ............................................................................................................. 3 Summary .................................................................................................................................... 4

1. Danish Retail Investors' Holdings of Banks' Own Funds .................................... 4
2. Bank's Obligations When Advising on Own Funds ......................................................... 7
3. Banks' Interest in Selling Own Funds .......................................................................... 7 3.1. Economic Incentive..................................................................................................................... 7 3.2. Other Factors................................................................................................................................... 8
4. Investors Can Take Action Themselves .......................................................................................... 9 Good Advice When Receiving Investment Advice ......................................................................... 9 Appendix 1 .................................................................................................................................................. 10

Banks' Sales of Their Own Funds 3 Banks' Sales of Their Own Funds Danes are keen on investing. So keen that they have placed more than DKK 645 billion in Danish investment funds and securities funds (as of 31 December 2025). This means that every Dane, on average, has invested approximately DKK 100,000 in investment funds, and it is important that they invest in investment funds that suit their specific needs. If banks primarily sell their own funds, this may involve a conflict of interest between the customer's interest in investing in the investment funds that best suit the customer's wishes and needs, and the bank's interest in selling their own funds to the customer. The Danish Financial Supervisory Authority (Finanstilsynet) has therefore analysed data on Danish retail investors' holdings of securities in Danish banks as of 31 December 2025 to determine the extent to which banks have sold their own funds to retail investors. On this basis, Finanstilsynet has been in dialogue with four banks and one fund brokerage company regarding why Danish banks' own funds generally occupy such a large share of retail investors' holdings of investment funds. The results have led Finanstilsynet to – in addition to publishing the extent of banks' sales of own funds in this report – provide a number of good tips for investors. The tips are intended to make it easier to navigate investment advice, which often takes its starting point in the banks' own funds.

Banks' Sales of Their Own Funds 4 Summary • The report shows that the majority of investment funds1 in Danish retail investors' holdings are affiliated with the investor's bank. Among the five largest Danish banks, own funds account for an average of 92% of retail investors' holdings of investment funds. The level is also high for other banks, but with differences across individual banks. • There are several reasons why banks sell their own investment funds. On the one hand, banks have an economic interest in selling own funds, as they generally earn more from selling these funds. On the other hand, banks justify this by stating that it is advantageous to have more control and knowledge about the products they sell and advise on. • If banks provide investment advice on funds where the bank receives commission for the sale, or if the bank advises solely on own funds, the bank must inform its customers about this and about the conflicts of interest it entails. • As an investor, you can take several steps to ensure that you invest in the funds that best suit you. The report therefore also contains good tips for individual investors. 1 The term is used in this report collectively for investment funds and securities funds, including divisions thereof. 2 The results of the note are based on holdings data from Euronext Securities A/S (Euronext) as of 31 December 2025 and the websites of Danish credit institutions as of the end of 2025. The data also includes foreign funds registered with Euronext. Investments in foreign investment funds not registered with Euronext are not included in the analysis. If there is a commission agreement between the bank and the fund, all divisions are shown as commission-bearing, even if some divisions may actually be without commission. The data similarly does not show whether investors invested in an investment fund before a distribution agreement was entered into with the bank. These factors mean that the calculation in this report of the distribution between external funds with and without intermediary commission is subject to some uncertainty. This uncertainty is not relevant for the calculation of holdings of own funds. 3 Data is as of early 2026.

Banks' Sales of Their Own Funds 5 Figure 1: Distribution of Danish retail investors' holdings of investment funds Source: Euronext Securities holdings data as of 31 December 2025. Note: The percentage indicates the share of Danish retail investors' holdings of investment funds distributed across the ten most used investment funds measured by market value and the other 43 investment funds. Many investment funds are affiliated with a bank through the company that administers the daily operations of the investment fund, known as an investment management company. Typically, the largest banks own their own investment management company, while smaller banks jointly own a smaller share of an investment management company with other banks. The funds administered by a company that the bank owns can be considered the bank's own funds. There are also Danish banks that do not have ownership shares in an investment management company. These banks may still have an affiliation with certain investment funds in other ways, for example, if the bank has ownership ties to a company that is not the investment management company but receives payment for performing specific tasks for the fund. This can be, for example, to perform portfolio management for the fund. Finanstilsynet also considers investment funds with such an affiliation to the bank to be the bank's own funds in this report4. Banks have an interest in selling own funds to their customers. Holdings data shows that retail investors largely invest in banks' own funds when they invest through their bank. 4 Conversely, investment funds from which the bank receives intermediary commission for intermediation to customers will not be covered by the concept of "own funds" in this report if the bank has no other affiliation with the fund than the intermediation agreement. 76% 24% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% The 10 largest investment funds The other 43 investment funds

Banks' Sales of Their Own Funds 6 Figure 2 shows investors' holdings of investment funds across Danish banks distributed by own funds, external funds – i.e., funds from other providers – where the bank receives commission for intermediation, and external funds without commission. Holdings of own funds account for 71% (measured as a weighted average). The remaining holdings consist of 24% in external funds that pay intermediary commission to the bank, while 5% consists of external funds that do not pay commission. 5 Among the five largest Danish banks, which account for 78% of the total holdings in Danish banks, own funds account for 92% of retail investors' holdings of investment funds. For other banks, the level is also high, but with differences across individual banks, see Figure 1 in Appendix 1. Some banks sell own funds only to a very limited extent, and some banks have no "own funds" affiliated with the group and therefore primarily sell commission-bearing external funds or external funds without commission. Figure 2: Danish retail investors' holdings of investment funds distributed by own funds, external funds with commission and other funds across banks Source: Euronext Securities holdings data as of 31 December 2025 and the websites of Danish credit institutions as of the end of 2025. Note: The percentage indicates the share (measured as a weighted average) of retail investors' holdings of investment funds measured by market value distributed by the type of connection between the bank and the investment fund. Own funds: Investment funds to which the bank has an ownership affiliation, both with and without intermediary commission. External funds with commission: Investment funds to which the bank 5 See footnote 2, there may be external funds that do not pay intermediary commission to the bank even though they are included as commission-bearing in the calculation. The calculation of external funds with commission is therefore associated with some uncertainty. 71% 24% 5% Own funds External funds with commission External funds without commission

Banks' Sales of Their Own Funds 7 has no ownership affiliation but which can pay intermediary commission to the bank in accordance with footnote 2. External funds without commission: Investment funds that neither have an ownership affiliation with the bank nor are commission-bearing, as well as possible data gaps. Figure 2 includes both investment funds that the customer has purchased on their own and investment funds purchased in connection with investment advice or portfolio management. Supplementary data from four banks, which together account for 29% of the total holdings in Danish banks, shows that customers in three out of the four banks are more likely to choose external funds when they invest on their own than when it is done through investment advice or portfolio management. This indicates that the banks in question particularly sell own funds when they provide investment advice. 2. Bank's Obligations When Advising on Own Funds It is lawful for banks to recommend own funds in investment advice. If the bank only advises on own funds, or if the bank receives intermediary commission to distribute certain funds, the bank must inform the customer in good time before the advice that the advice is not independent. The bank must also inform the customer that the selection of investment products in the advice is limited to only own funds, if this is the case. Finally, the bank must inform customers about the conflicts of interest between the bank and the customer that the sale of own funds gives rise to. Banks must always safeguard the customer's interest when providing investment advice. Investment advisors must therefore not recommend that the customer invest in funds that do not meet the customer's wishes and needs, simply because the bank earns more from it6. 3. Banks' Interest in Selling Own Funds Based on the analysis of retail investors' holdings of investment funds, Finanstilsynet has been in dialogue with four banks and one fund brokerage company regarding why Danish banks' own funds generally occupy such a large share of retail investors' holdings. The dialogue showed that there are a number of factors that may contribute to banks having an interest in selling their own funds rather than external funds. These factors are discussed below. 3.1. Economic Incentive Banks primarily have an economic interest in selling own funds because the bank thereby has the opportunity to earn more than if it sells external funds. When the bank sells own funds, the bank or an affiliated company performs tasks for the investment fund, which the bank earns money on. This can be services related to administration, 6 Order on investor protection in securities trading §§ 3 and 6, paragraph 2, and order on the organisational requirements for securities traders § 9, paragraph 2.

Banks' Sales of Their Own Funds 8 portfolio management and distribution. How much the bank earns depends, among other things, on how many tasks the bank or its affiliated companies perform for the investment fund. If the bank, for example, owns the investment management company and the portfolio manager for the investment fund and simultaneously receives intermediary commission to distribute the product, the bank has income from all three of the most significant cost components in the investment fund, see Figure 3. The remuneration for the tasks is typically calculated as a percentage of the assets under management, so earnings increase when customers invest more. Therefore, the bank has an interest in advising customers to choose the bank's own funds. The fees are ultimately paid by investors in the form of costs, which are deducted from the investment fund's return. Similarly, the bank can receive a fee when selling external funds. This is called intermediary commission. Here, the bank will also have an economic interest in selling the relevant fund due to the intermediary commission. Figure 3: A bank's interest in selling its own fund as a result of income from the investment fund directly and through ownership-affiliated companies Note: Intermediary commission and dividends from the investment management company and portfolio manager are marked with a dotted line, because across product and cost structures and business models, it varies whether the bank receives intermediary commission, and whether it owns the investment management company and/or portfolio manager. 3.2. Other Factors The dialogue with the companies also shows that, in addition to the economic incentive, a number of other factors may also be significant for why a bank particularly sells own funds to its customers. The companies explained, among other things, that the following factors are significant reasons for selling own funds: • Securing the investment advisor's knowledge: It requires resources and time to have sufficient knowledge about an investment fund to be able to advise on it. By limiting the selection of investment funds in the advice to the investment funds the bank knows best, it can be better ensured that investment advisors have sufficient knowledge about the financial products they advise on than if the advice were to cover all products on the market. • Consideration for the customer's investment needs: It is often better for customers with smaller assets to have a simpler investment portfolio to keep investment costs down. Therefore, banks often recommend a narrower product selection to less wealthy customers, where the bank's own funds sufficiently cover the customers' needs. Conversely, customers with larger assets are often offered a larger assortment of investment funds and more complex products. • Better control over performance and strategy: Many banks have investment funds with investment strategies that resemble each other. By creating and selling own funds, even if similar funds already exist on the market, banks can more easily and quickly control the products' performance, costs, investment strategy, etc. At the same time, they can ensure that special investment policies in the bank are complied with, e.g., requirements for sustainability or to refrain from investing in certain types of assets. It is more difficult for the bank to exert the same influence on external funds. 4. Investors Can Take Action Themselves It is important to uncover and take a stance on one's finances, investment horizon, purpose, and risk tolerance before investing. If in doubt, investment advice can be a good solution. As an investor, you can take several steps to ensure that you choose the funds that best suit your needs. Finanstilsynet provides the following tips: Good Advice When Receiving Investment Advice

1. Check the costs: Always check the costs for the individual investment fund. Use, for example, information from the bank, PRIIPs KID (document with central information) and the prospectus. Also compare with other similar funds. Check the bank's price lists to see if you have to pay other fees associated with the transaction.
2. Investigate alternatives outside your bank: There may be other investment products on the market that are better for you than those your bank presents to you. Therefore, investigate whether there are better or cheaper alternatives at other banks, online investment platforms or other providers. You can decline the advice and trade yourself, which can be cheaper. But be aware that you take responsibility for understanding the investments yourself.
3. Consider the advantages and disadvantages of independent advice: You can choose to pay for advice from an independent advisor instead of receiving advice through your bank. An independent advisor may not receive intermediary commission and must also advise on other funds than their own. However, still be aware of the advisor's own fees.
4. Remember to look at tax conditions: Tax rules can have a great impact on what you get in return in the end. Therefore, be aware of tax conditions, especially if you do not receive advice on this.

Banks' Sales of Their Own Funds 10 Appendix 1 Figure 1: Danish retail investors' holdings of investment funds distributed by own funds, external funds with commission and other funds (measured by market value) across banks Source: Euronext Securities holdings data as of 31 December 2025 and the websites of Danish credit institutions as of the end of 2025. Note: The percentage indicates the share (measured as a weighted average) of retail investors' holdings of investment funds measured by market value distributed by the type of connection between the bank and the investment fund. Own funds: Investment funds to which the bank has an ownership affiliation, both with and without intermediary commission. External funds with commission: Investment funds to which the bank has no ownership affiliation but which can pay intermediary commission to the bank in accordance with footnote 2. External funds without commission: Investment funds that neither have an ownership affiliation with the bank nor are commission-bearing, as well as possible data gaps. 71% 24% 5% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Bank 1 Bank 2 Bank 3 Bank 4 Bank 5 ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ......... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ......... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... .........