As the bank for the country and the people, being able to offer attractive and innovative price models is important to us. Individual prices and flat-rate price models or on request also performance-dependent conditions underpin our claim to guarantee a fair and transparent tariff structure. For LLB funds, we forego retrocessions (portfolio maintenance commissions), which makes our funds significantly cheaper in comparison to the market. We pass retrocessions received on third-party fund holdings on to our clients in full. Thanks to our simple and easy-to-understand tariff structure, the fees and conditions for clients are visible at a glance. Over the coming year, we will make our tariff structure simpler and through the bundling of services even clearer.
We also have a very fair approach when it comes to fees for our LLB strategy funds: we are one of the first banks to introduce a performance-based model for strategy funds and a swap-based model for some fixed-income funds, with pricing being linked to the interest rate.
Financial planning for private individuals and businesses
The volatile environment and low interest rates make it increasingly difficult to find attractive investments. The need for professional and holistic private financial planning therefore continues to grow. Our answer to this is the “LLB Compass”, which provides solutions for all stages of life and business. Our 360-degree financial planning covers all the important topics such as assets, financing, pension planning, real estate, taxes and estates. LLB offers three separate advisory packages for corporate clients. This allows us to take account of the fact that for owners of small and medium-sized enterprises (SMEs) private and business assets are often closely interlinked.
Our wide range of investment solutions includes “Sustainable asset management mandates”, developed by the Asset Management Business Area of the LLB Group. With these, only securities in the MSCI universe with a favourable ESG rating are considered when constructing a portfolio. Certain sectors such as tobacco, alcohol, nuclear energy and armaments can be excluded from the portfolio if a client so wishes. As demand grows, the investment process is being refined ever further. The inclusion of sustainability aspects is also possible for “LLB Invest” investment advisory packages.
Risk-conscious growth in the mortgage lending business
The development of the real estate and mortgage market plays a key role in the economy. In Liechtenstein, LLB has a leadership position in the mortgage lending business with a market share of around 50 per cent. LLB and Bank Linth also extend mortgages in eastern Switzerland and thus act as important partners to private individuals and businesses. For the LLB Group, the quality of the mortgage portfolio is key: growth must be sustainable and risk-conscious and in line with the type of property and the development of the market in the region. In 2019, mortgages accounted for 87.3 per cent (2018: 86.5 %) of loans granted by the LLB Group, corresponding to CHF 11.3 billion (2018: CHF 11.1 billion) (see chapter “Finance and risk management”).
We promote passive houses, new builds and renovations with the Minergie or other comparable energy standard through specially tailored eco and renovation mortgages. Our clients benefit from flexible contract components and preferential conditions. The term of the fixed-rate mortgage is, for example, five years, and then it is continued as a variable-rate mortgage.
LLB Pension Fund Foundation for Liechtenstein
With the LLB Pension Fund Foundation, we are the only bank in Liechtenstein with a collective foundation for Liechtenstein SMEs and that since 2005. Owing to its solid financial position, it is gaining popularity. At the end of 2019, Liechtenstein’s youngest collective foundation managed the largest amount of pension fund assets in the country at CHF 869 million (2018: CHF 756 million), making it an essential pillar of the domestic pension fund market. At year’s end, it provided services to 514 affiliated companies (2018: 450) with 5'490 active insured persons (2018: 5'300) and had a coverage ratio of 107 per cent (2018: 101 %). The LLB Pension Fund Foundation has a very good structural ratio: for each pensioner there are 14 active insured contributors (2018: 15 active insured contributors).
The LLB Pension Fund Foundation is set to grow significantly from 2020: the Zurich Life Insurance Company will withdrawn from the Liechtenstein pension market by the end of 2022. It has recommended that the customers of its Malbun Collective Foundation, which has around 230 affiliated companies with 1'800 active insured persons, switch to the LLB Pension Fund Foundation.
In order to be able to actively participate in shaping the legal framework, the LLB Pension Fund Foundation is represented on the Executive Board of the Liechtenstein Pension Scheme Association (LPKV). In this way, it is also instrumental in the expansion of the domestic market.