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Avanza Bank: Sweden's Digital Savings Revolution
Introduction: When Simplicity Becomes Strategy
In the sprawling Nordic financial landscape, where centuries-old banking dynasties have long dominated, a dot-com era startup emerged with an audacious promise: give customers more money back than any other bank or pension company in Sweden. Twenty-five years later, that startup—Avanza—has become a Swedish online bank based in Stockholm, specializing in savings, investments and pensions, and the largest stockbroker in Sweden and on the Stockholm Stock Exchange, with 2,188,900 customers and a 7.9% share of the Swedish savings market.
How did a company founded during the internet bubble, when most dot-com ventures vanished into the ether, not only survive but thrive to the point where approximately one in every five Swedes are Avanza customers? The answer lies in an elegantly simple strategy executed with relentless discipline: build a company you yourself would want to be a customer of.
Avanza was founded with a simple idea: "We wanted to build a company we ourselves wanted to be customers. That's why we always take as little pay as possible only by our customers, while offering cheaper, better and simpler products than anyone else." This founding philosophy—cheaper, better, simpler—became the triple mantra that would guide every product decision, every pricing move, and every customer interaction for the next quarter century.
The story of Avanza is also the story of Sweden's unique relationship with retail investing—a nation where equity investing is akin to a national sport, with almost a quarter of the population directly owning shares in publicly listed companies and 70% investing in mutual funds. In this fertile ground, Avanza planted seeds that would grow into a formidable financial institution, one that has won the Swedish Quality Index's award for most satisfied savings customers for fifteen consecutive years.
This deep dive will explore how Avanza navigated the dot-com crash, capitalized on regulatory tailwinds, survived market upheavals, and positioned itself for a new era of growth. Along the way, we'll examine the key inflection points that transformed a scrappy online broker into Sweden's most trusted financial platform—and assess the competitive threats and strategic challenges that lie ahead.
The Swedish Banking Context & Founding Story (1997-2001)
A Market Ripe for Disruption
To understand Avanza's emergence, one must first understand the Sweden of the mid-1990s—a nation recovering from one of the most severe banking crises in modern Western history.
The Swedish banking crisis was part of a major financial crisis that hit the Swedish economy in 1991-93. Its origin should be traced to financial liberalisation in the mid-1980s that triggered a rapid lending boom. The pegged exchange rate for the krona prevented monetary policy from mitigating the boom by means of interest rate increases. The boom turned into bust and crisis around 1990, threatening a meltdown of the banking sector.
The aftermath reshaped Swedish finance permanently. The Swedish emergency bank authority divided banks into groups. Obviously bankrupt banks were merged into state-owned Nordbanken, eventually becoming Nordea. A second group of private banks, Swedbank and SEB, had too little capital but could be revived. After long negotiations with the state, their shareholders decided to recapitalize them at their own expense.
What emerged was a Swedish commercial banking structure dominated by four big banks: Swedbank, Handelsbanken, Nordea and SEB. These banks are important players on most segments of the financial market. This oligopolistic structure created the classic conditions for disruption: entrenched incumbents with high cost structures, customers accustomed to limited choices, and a banking model built for an analog age.
Meanwhile, Sweden was becoming one of the most internet-connected nations on Earth. The combination of post-crisis banking consolidation, high digital adoption, and a historically strong retail investing culture created perfect conditions for a digital disruptor.
Sven Hagströmer: The Entrepreneur Behind the Vision
Sven Hagströmer, born on November 30, 1943, is a Swedish business executive best known as the founder of Avanza Bank and investment company Creades. He is also the initiator of the non-profit organizations AllBright and Berättarministeriet.
Hagströmer was no newcomer to finance. He was a portfolio manager at Gränges AB from 1969 to 1973 and at Investor from 1973 to 1980. He started the firm Sven Hagströmer Fondkommission AB in 1981. It later turned into the commercial bank Hagströmer & Qviberg, publicly known as HQ Bank.
This background is crucial: Hagströmer wasn't a tech entrepreneur who stumbled into finance—he was a finance industry veteran who recognized technology's transformative potential. His time at Investor, the Wallenberg family's legendary holding company, gave him a front-row seat to how Sweden's financial establishment operated. He knew its weaknesses intimately.
Hagströmer is also a man of colorful dimensions. He is a dedicated entrepreneur and was one of the venture capitalist "dragons" in the Swedish version of Dragons' Den on SVT. He is also a pilot. That pilot's license led to a dramatic moment in 2014: The plane plunged into the water at 110 kilometers per hour and capsized in connection with Hagströmer landing at the island Rödlöga off Norrtälje. He was rescued after an hour and a half. The reason for the incident must have been that he had forgotten to fold the aircraft wheels when he was about to land in the water. After the accident, Hagströmer decided to stop flying.
The seaplane crash, where Hagströmer hung upside down strapped into a capsized aircraft and fought to survive for ninety minutes, perhaps says something about the man's resilience—the same quality that helped him build Avanza through the dot-com crash and multiple market crises.
Sven Hagströmer is a relative of Raoul Wallenberg and he founded the Raoul Wallenberg Academy in 2012. He is a passionate book collector and founded the publishing agency Fri Tanke together with Christer Sturmark and Björn Ulvaeus in 2007. Yes, that Björn Ulvaeus—of ABBA fame. Hagströmer moves in circles where Swedish business, culture, and philanthropy intersect.
From HQ.se to Avanza: The Formative Years
Founded in 1999 as HQ.se by entrepreneur Sven Hagströmer, the company initially focused on providing online access to stock trading for individual investors. The name "HQ" came from Hagströmer & Qviberg, the bank Hagströmer had built earlier—though HQ.se was a separate venture focused purely on the emerging internet channel.
Hagströmer has been Chairman of Avanza's Board of Directors since 1999—a remarkable twenty-six-year tenure that continues to this day. This continuity of vision at the top has been instrumental in maintaining strategic consistency through multiple market cycles.
The early years were a race for scale in Sweden's nascent online brokerage market. In 2001, HQ.se merged with Aktiespar Fondkommission and Avanza, adopting the Avanza name and establishing itself as Sweden's largest online brokerage at the time.
In 2001, HQ.se acquired Avanza and changed its name to Avanza, which became the largest stockbroker in Sweden, with 80,000 active customers. The merger wasn't just about scale—it was about survival. The dot-com bubble had burst, and only the strongest players would emerge from the carnage.
The timing was fortunate in a perverse way. While American online brokers like E*Trade and Ameritrade hemorrhaged money after the crash, the Nordic market was smaller, the competitive landscape less crowded, and the merger created a platform with sufficient scale to weather the storm. Where many dot-com ventures raised vast sums and burned through them on marketing, Avanza's approach was more disciplined: build a better product, charge less, and let word-of-mouth do the heavy lifting.
Headquartered in Stockholm, Avanza operates primarily through its digital platform, emphasizing low fees, user-friendly tools, and a broad range of financial products tailored to private savers. The company received its banking license in 2005, enabling expansion into deposit and lending services.
That 2005 banking license was transformational. No longer just a broker, Avanza became a full-service digital bank—able to hold customer deposits, earn net interest income, and offer a complete financial home for Swedish savers. It was the foundation for everything that followed.
For investors, the founding story contains several important signals: founder-led governance that has persisted for over two decades; a willingness to consolidate during crisis rather than overextend; and a business model designed from day one around customer economics rather than venture capital metrics.
Building the Platform: Product Innovation Era (2003-2011)
The Pension Breakthrough
With the merger complete and the dot-com dust settling, Avanza began the methodical work of product expansion that would transform it from online broker to comprehensive savings platform.
In 2003, the company introduced Sweden's first fully internet-based Individual Pension Savings (IPS) account, enabling seamless online management of retirement funds. This wasn't simply a product launch—it was a strategic land grab into one of the most valuable segments of personal finance.
Pension savings are sticky. Once a customer establishes a pension account and begins regular contributions, inertia keeps them there for decades. By offering Sweden's first purely digital pension product, Avanza was building customer relationships that would compound over working lifetimes.
The business was expanded in 2004 to include Private Banking for high net worth individuals. This upmarket move was counterintuitive for a platform built on low costs, but strategically brilliant. High net worth customers bring larger asset balances, generate more transaction revenue, and—critically—tend to be more engaged investors who value sophisticated tools and execution quality over hand-holding advisory services.
The Banking License: Metamorphosis Complete
A pivotal milestone occurred in 2005 when Avanza received a banking license from Swedish authorities, allowing it to operate as a full bank and expand into deposit-taking and other regulated activities. That same year, the company founded subsidiaries Avanza Pension, specializing in pension and insurance accounts, and Avanza Fonder, focused on fund management.
The corporate structure that emerged—banking subsidiary, pension subsidiary, fund company—created multiple revenue streams and competitive moats. Each subsidiary could be optimized for its specific regulatory requirements while sharing customer data, technology infrastructure, and brand equity across the group.
Avanza Zero: The Revolution That Costs Nothing
Then came 2006—and perhaps the most audacious product launch in Swedish retail finance history.
The fund company was founded in 2006 and the first of its own funds was Avanza Zero – Sweden's first no-fee index fund – which was launched the same year.
Let that sink in. In 2006, years before Vanguard and BlackRock ignited the fee wars that would eventually transform global asset management, a Swedish online bank launched a completely free index fund. During the same year, another wholly owned subsidiary, fund manager Avanza Fonder, was launched, along with their first product Avanza Zero, a completely free-of-charge index fund tracking the OMX Stockholm 30 index.
Avanza Zero has an inception date of May 22, 2006, and charges 0% expenses. Today, that fund manages over SEK 57 billion in assets—all without charging customers a single krona in management fees.
The strategic logic was elegant: by offering a flagship product at zero cost, Avanza established itself as the undisputed champion of retail investor interests. Customers who came for Avanza Zero stayed for the broader platform. The fund became a customer acquisition engine that cost effectively nothing to operate (index funds are largely passive) while generating enormous goodwill and brand loyalty.
"Back in 2006, we launched Avanza Zero, a fund with no commissions, and five years ago Avanza was the first in the industry to offer free stock trading. Now we are doing it again." This quote from a 2021 press release illustrates how Avanza repeatedly returned to the zero-fee well as a competitive weapon.
Content + Platform = Engagement
In 2006, Avanza acquired stock magazine Börsveckan and launched Placera, a free online newspaper. Placera is focused on equities, funds and savings. The two are editorially independent and are grouped under Placera Media, a wholly owned subsidiary of Avanza.
This media acquisition was unusual for a bank but reflected sophisticated thinking about customer engagement. By owning financial content properties, Avanza could drive traffic to its platform, keep customers engaged between transactions, and position itself as a trusted source of investment information—not just execution services.
Completing the Product Suite
In 2009, the offering was expanded to include Super Loan, Sweden's cheapest margin lending product. Margin lending generates attractive spreads for brokers, but Avanza characteristically offered it at rates that undercut competitors.
In 2010, Avanza was named the winner of the Swedish Quality Index's (SQI) survey of Sweden's most satisfied savers. It was the first time that the survey was conducted in this category. This began an unprecedented winning streak that would extend for fifteen consecutive years.
By 2011, Avanza had assembled the complete toolkit for retail investors: brokerage accounts, ISK tax-advantaged accounts, pension products, banking services, margin lending, proprietary funds, and financial media properties. The platform was ready for its next phase of growth—and a regulatory gift from the Swedish government was about to supercharge it.
Key Inflection Point #1: The ISK Account Revolution (2012)
A Regulatory Gift from Stockholm
Sometimes disruption comes not from entrepreneurs but from policymakers. In 2012, the Swedish government introduced what would become the most powerful catalyst for retail investing Sweden had ever seen: the Investment Savings Account, or ISK (Investeringssparkonto).
ISKs, literally "investment savings accounts", were introduced in 2012 as a way for people in Sweden to easily invest in shares and funds. An estimated 3.5 million people in Sweden have an ISK, with 75 percent of these accounts having a balance of 300,000 kronor or less.
The Investment Savings Account (ISK) was introduced in 2012 in response to a decision by Parliament to stimulate saving in funds and equities. There is no tax on capital gains in ISKs; instead, the saver pays an annual standard rate of tax.
The genius of the ISK was its radical simplification of investment taxation. ISK accounts bring many benefits for investors: No Profit Tax – investors can buy and sell as much as they want, without having to pay profit tax on sales. Easier Tax Returns – investors that solely use an ISK account don't have to report any share buys or sells, it's all reported to the Swedish Tax Department automatically.
Under traditional taxation, Swedish investors faced a 30% capital gains tax on realized profits. Every sale required calculation, reporting, and payment. This created friction that discouraged trading and—more importantly—made the investment process feel complicated for ordinary savers.
The ISK eliminated this entirely. Instead of taxing actual gains, ISK accounts are subject to schablonskatt, a simplified taxation method based on a standard income rather than actual gains or losses. Users do not have an obligation to declare wins or losses on their own as it is done automatically to the Swedish Tax Agency.
Why This Mattered for Avanza
The ISK wasn't just good for retail investors—it was transformative for Avanza's business model. Traditional banks with their complex advisory models and branch networks couldn't easily capitalize on the ISK opportunity. But Avanza's low-cost digital platform was perfectly positioned.
Most consumer banks in Sweden, like Swedbank, SEB and Handelsbanken, offer ISKs and KFs, as well as specialist stockbrokers like Avanza or Nordnet, which are often significantly cheaper.
The cost differential between Avanza and traditional banks became even more meaningful under ISK taxation. When capital gains aren't taxed directly, maximizing pre-tax returns through lower fees becomes more valuable. Avanza's low-cost model wasn't just attractive—it was optimal for the new tax regime.
A new savings alternative with additional tax benefits called the Investment Savings Account was introduced on the site in 2012. Avanza passed 280,000 customers by the end of the year.
The numbers tell the story. From 280,000 customers in 2012, Avanza would grow relentlessly over the following decade, with the ISK serving as the default account type for new customer acquisitions.
Platform Evolution Following ISK
A totally new site was launched for all customers in 2013, making Avanza the first to offer streamed real-time quotes. During the year, Sweden's cheapest mortgage loan was introduced for Private Banking customers.
In 2014, a new office was opened in Gothenburg focusing on occupational pensions and Private Banking. This physical expansion—unusual for a digital-first company—reflected the complexity of selling occupational pension products, which often require relationship-building with employers and HR departments.
Combined with voluntary savings through the ISK and endowment insurance, the outcome is striking – over 90% of Swedish workers are also investors. Sweden became perhaps the most retail investor-friendly market in Europe, and Avanza rode this wave to market leadership.
For investors analyzing Avanza, the ISK revolution demonstrates both opportunity and risk. The regulatory tailwind that propelled Avanza's growth could reverse if tax policy changes. However, the Swedish government has shown continued commitment to tax-advantaged investing—in 2025, the first SEK 150,000 a person saves in an ISK or in an endowment insurance will be tax-free, with the tax-free level rising to SEK 300,000 in the 2026 income year. The direction of policy remains favorable.
Key Inflection Point #2: Free Trading & Digital Tools (2016-2019)
The 2016 Free Trading Gambit
If Avanza Zero in 2006 established the company's willingness to compete on price, the 2016 free trading launch cemented it as industry strategy.
In 2016, Avanza was the first in Sweden to offer real-time deposits from other banks. Free stock trading on the Stockholm Stock Exchange was launched for customers with savings capital of less than SEK 50,000.
This wasn't free trading for everyone—it was strategically targeted at new and small investors, the customers who would otherwise be most sensitive to transaction costs. By eliminating brokerage fees for accounts under SEK 50,000, Avanza removed the last significant barrier to entry for beginning investors.
The offer is an extension of Avanza's existing Start offer, which since 2016 has given free stock trading on the Stockholm Stock Exchange to those with savings capital that has not passed SEK 50,000.
The math made sense: small accounts generate minimal brokerage revenue anyway, but every customer who starts small has the potential to grow. By acquiring customers at zero marginal cost, Avanza was betting on lifetime value—the same bet that would later drive growth strategies at fintech companies worldwide.
During the year, Avanza passed a half million customers.
Automation and Decision Support
To make choosing stocks easier, Avanza in 2017 introduced the Stock Generator, and for funds Avanza Auto, with six automatically managed funds. Growth was record high in 2017 with the number of customers passing 700,000.
Avanza Auto represented an important strategic evolution. Traditional robo-advisors like Betterment and Wealthfront had launched in the US to much fanfare, but Avanza took a different approach: rather than creating a separate robo-advisory service, it integrated automated investment tools directly into its existing platform.
This integration strategy avoided the cannibalization risk that plagued many traditional financial institutions. Customers could choose their level of engagement—fully self-directed, partially automated, or fully automated—all within the same Avanza account.
The World's Cheapest Global Fund
In 2018, the company launched the cheapest global fund in the world, with an annual management fee of 0.05%.
Our margin loan was improved, but most importantly we launched Avanza Global, the world's cheapest global index fund for individual investors, according to a survey by Morningstar. This led to an award for "New Savings Product of the Year", and we were also named "Bank of the Year".
Avanza Global at 0.05% annual expense charged less than even Vanguard's lowest-cost index funds at the time. For Swedish investors wanting global equity exposure, the value proposition was irresistible: world-class diversification at a cost that was essentially zero.
In addition, Avanza received the Swedish Quality Index's award for Sweden's most satisfied customers in the savings category for the ninth consecutive year.
A Decade of Customer Satisfaction Dominance
2019 was the year when Avanza won the Swedish Quality Index's award for the most satisfied savings customers in Sweden for the tenth consecutive year.
Ten consecutive years of customer satisfaction leadership is remarkable in any industry. In financial services—where customer complaints and regulatory frictions are endemic—it borders on unprecedented. The winning streak reflected not just low prices but consistent execution across technology, customer service, and product development.
By the end of 2019, Avanza had built a formidable competitive position: market-leading costs, comprehensive product suite, dominant customer satisfaction scores, and nearly 900,000 customers. The stage was set for explosive growth—though no one could have predicted the catalyst that would arrive in early 2020.
Key Inflection Point #3: The COVID-19 Retail Investing Boom (2020-2021)
The Pandemic as Catalyst
March 2020: global markets crashed as COVID-19 spread. The OMXS30 index fell nearly 30% from its February highs. For most financial companies, this spelled disaster. For Avanza, it spelled opportunity.
Avanza was impacted as well, not least because of the growing recognition of the importance of savings. As a result, Avanza reported record growth in 2020, with over 300,000 new customers. Another contributing factor was the launch of three new Avanza funds, two of which are actively managed.
Three hundred thousand new customers in a single year—more than tripling the annual growth rate of previous years. The number of individuals, or retail investors with a direct share ownership in Swedish listed companies increased sharply surrounding the pandemic. In addition, the number of retail investors who invested in shares for the first time also increased.
The pandemic investing boom was a global phenomenon, but Sweden's unique characteristics amplified it. The country's distinctive pandemic response—avoiding strict lockdowns—kept the economy more open than elsewhere, while government stimulus supported household incomes. According to Eurostat, Sweden's household savings rate stood at 20.25% in Q1 2020 – up from 11.65% in Q4 2019.
Swedes found themselves with more time, more savings, and a stock market that had just dropped 30%. For a nation already inclined toward equity investing, the opportunity was too obvious to ignore. And Avanza—with its easy account opening, free trading for small accounts, and superior mobile app—was the obvious destination.
The Million Customer Milestone
Interest in saving was strong and Avanza's record-high growth continued. We passed 1 million customers who own shares and 1 million who invest in funds. We also reached our financial targets for 2025, four years in advance.
Reaching financial targets four years early speaks to just how unexpected the COVID growth surge was. Avanza had built a platform with significant operating leverage—the marginal cost of adding a customer was minimal—and the pandemic stress-tested that scalability in real-time.
At the same time, net brokerage income for the first quarter is expected to more than double compared with the same quarter in 2019. Avanza has had very strong customer growth, a high net inflow and extremely high customer activity. The high customer activity will enable Avanza to more than double net brokerage income for the first quarter compared with the first quarter of 2019, when net brokerage income amounted to SEK 112 million.
Continued Growth Trajectory (2021)
The momentum continued through 2021, even as pandemic restrictions eased and normal life resumed. The customers acquired during the crisis proved sticky—they didn't abandon their new investing habits when the world reopened.
Avanza has won SKI (Swedish Quality Index) award "Sweden's most satisfied customers" 15 years in a row between 2010 and 2024. Avanza won the award as year's bank 3 years in a row between 2018 and 2020 from Privata Affärer.
The pandemic era cemented several important dynamics. First, a new generation of Swedish investors had been onboarded to Avanza's platform—customers who would likely remain for decades. Second, the company had proven its technology could handle extraordinary volume surges. Third, competitors who might have challenged Avanza's position were focused on their own pandemic challenges, giving Avanza breathing room to consolidate gains.
For investors, the COVID period demonstrated both the opportunity and the risk in Avanza's model. The opportunity: operating leverage means revenue growth flows to the bottom line with minimal incremental cost. The risk: the boom was partially driven by extraordinary circumstances—elevated savings rates, government stimulus, and pandemic-induced boredom—that couldn't persist indefinitely.
Navigating Challenges: 2022-2024
Market Headwinds
The exuberance couldn't last forever. The conditions in the savings market have changed dramatically over the past two years, and in 2023, the global economy entered a mild recession. This affected households whose ability to save was reduced. However, in light of tougher times, the importance of saving becomes even clearer. With higher interest rates, interest-bearing savings accounts grew in popularity as a savings option.
2022 brought a brutal reality check: war in Ukraine, energy crisis, inflation surge, and the worst stock market since 2008. For a company whose revenues correlate with trading activity and asset values, this was a challenging environment.
Net interest income increased due to higher market interest rates. Net brokerage income and net currency-related income decreased as a result of lower trading activity. Fund commissions were lower as well.
The rising interest rate environment created an interesting offset. While brokerage and fund revenues suffered from lower activity and lower asset values, net interest income surged as rates rose. This natural hedge is a structural feature of Avanza's diversified business model—different revenue streams respond differently to macroeconomic conditions.
Leadership Transition & Strategic Reset
After years of growth under CEO Rikard Josefson, who had led the company through the COVID surge, Avanza began a leadership transition in 2023-2024.
The boards of directors of Avanza Bank Holding AB and the subsidiary Avanza Bank AB have appointed Gustaf Unger as the new Chief Executive Officer. Gustaf will assume his position as soon as the Swedish Financial Supervisory Authority has approved the suitability assessment. Gustaf Unger has both broad and deep bank experience from several senior positions within mainly SEB and Nordea. The focus has been savings and investments through wealth management and private banking, as well as pension. Additionally, he has many years of experience within bank related infrastructure regarding securities. In the last two years, Gustaf Unger has been one of the cofounders of a fintech platform focused on the commercial credit market.
Gustaf Unger, CEO, was born in 1973, employed since 2024, holds an M.Sc. in Business Administration and Economics from Stockholm University, an M.Sc. in Engineering from KTH Royal Institute of Technology, and a PhD in Operations Research and Mathematical Finance from ETH ZĂĽrich.
Unger's background—engineering, business, and a PhD in mathematical finance from one of Europe's most rigorous technical universities—represents a somewhat different profile than typical bank CEOs. His experience at Nordea and SEB gives him deep knowledge of how incumbent banks operate, while his recent fintech entrepreneurship suggests comfort with disruptive business models.
Gustaf Unger assumed the position of CEO on 25 March 2024. Gunnar Olsson was acting CEO during the period 1 January – 24 March and thereafter assumed the position of deputy CEO.
2024: Strong Growth Returns
"2024 was a fantastic year for Avanza with strong growth. The net inflow of SEK 86 billion was the second highest amount ever. That customers are choosing us for their savings is the result of our customer focus and rapid innovation. At Avanza, we are driven by making savings and investments enjoyable and uncomplicated – always with the customer's best interests in mind. This is also critical going forward as we execute on our strategy and to reach the ambitious targets we have set for 2030," says Gustaf Unger, CEO of Avanza.
Avanza's most important target is to have Sweden's most satisfied savings customers every year according to the Swedish Quality Index survey. In 2024, Avanza won the award for the 15th consecutive year while increasing its lead in the industry and ranking highest in every category.
Fifteen consecutive years of customer satisfaction leadership—an unprecedented streak in Swedish financial services. The award isn't just a marketing trophy; it correlates with customer retention, word-of-mouth referrals, and pricing power.
The Sigmastocks Acquisition
The most significant strategic move of 2024 came in December: Avanza and Sigmastocks' owners entered into an agreement whereby Avanza is acquiring Sigmastocks in its entirety for a price of SEK 21.1 million. The acquisition is conditional upon an ownership assessment by the Swedish Financial Supervisory Authority and is expected to close in May 2025. The acquisition enables Avanza to further develop Sigmastocks' current solution and offer digital discretionary portfolio management to its over 35,000 Private Banking clients.
Sigmastocks was started in 2014 and since 2021 offers a digital discretionary portfolio management service based on quantitative factor investing, where factors such as cash flow and profit margin are weighted against each other. The target portfolio consists of 40 stocks in Sweden, Europe and the U.S.
Online broker Avanza received approval from the Swedish Financial Supervisory Authority for its acquisition of Sigmastocks, a deal first announced in December 2024. The transaction is now finalized.
This acquisition, though small in absolute terms, signals an important strategic evolution. Avanza has historically been a self-directed platform—customers make their own investment decisions. Sigmastocks brings algorithmic portfolio management, allowing Avanza to serve customers who want professional management without the high fees of traditional wealth managers.
"Our ambition is to become the market leader in Private Banking. One way to get there is to challenge and compete for the 1,000 billion in traditional discretionary management. Building a digital discretionary solution from scratch takes a long time. Through the acquisition, we gain access to a technical platform that we will further develop and over time also plan to adapt for more target groups," says Gustaf Unger, CEO of Avanza.
Current State & Strategic Position (2025)
Scale Achieved
As of late 2025, Avanza has achieved a scale that makes it a systemically important player in Swedish retail finance.
As of October 2025, Avanza serves 2,223,500 customers, marking a net increase of 151,800 for the year and reflecting strong growth in the Swedish retail investment market. It manages total savings capital exceeding SEK 1,000 billion, equivalent to approximately 7.9% of the overall Swedish savings market.
Over two million customers and over one trillion SEK in assets—roughly $95 billion USD at current exchange rates. For context, this is larger than many publicly traded US asset managers and brokerages.
Customer base expanded by 9% to 2,204,000, and savings capital increased 14% to SEK 1,054 billion.
Avanza's market share of the Swedish savings market is 7.9%, or 18.9% as a share of Sweden's population. Avanza's share of the total net inflow was 17.9% rolling 12 months.
That 18.9% penetration of Sweden's adult population is extraordinary for any financial services company. Nearly one in five Swedish adults has an Avanza account.
Financial Performance
Quote from Gustaf Unger, CEO: "It was an eventful quarter in the world, for Avanza and for our customers. High trading activity in combination with a continued strong net interest income means that we are today reporting the best quarterly results in Avanza's history. Despite the recent stock market turmoil and trade policy announcements, I am optimistic about the future. Our customers have sound savings habits and are aware of the importance of saving also in challenging times."
Operating profit reached a record SEK 818 million in Q3 2025, up 24% year-over-year, driven by strong trading, net brokerage, and interest-related income streams.
Avanza Bank maintained a strong return on equity at 42%, with earnings per share increasing by 13% compared to the previous quarter. Return on equity of 42% is in line with the previous quarter.
A 42% return on equity is exceptional by any standard—and particularly impressive for a financial services company. This reflects the capital-light nature of Avanza's business model: the company generates substantial profits relative to the modest capital required to support its operations.
International Expansion Begins
As of 17 September 2025, Avanza offers digital trading in about 100 London Stock Exchange–listed companies, priced in pounds sterling with a £1 minimum commission, and plans GBP currency accounts so Private Banking and Pro clients can hold balances and avoid per-trade FX fees.
This represents Avanza's first tentative steps beyond the Swedish market. While not a full international expansion, offering UK stocks in GBP signals the infrastructure and regulatory preparations underway for broader geographic ambitions.
Sweden is one of the most well-developed and advanced markets in Europe and Avanza is by far the most successful savings and investment platform. Having been able to reach such a position in Sweden suggests that Avanza has excellent opportunities to succeed in other countries. The aim is to be established in one or more European markets outside Sweden by the end of 2030.
The Business Model Deep Dive
Revenue Streams
Avanza's revenue model has evolved significantly since its founding as a pure brokerage platform. In 2022, the revenue mix was: Net brokerage income 32%, Fund commissions net 19%, Currency-related income net 12%, Net interest income 27%, and Other income net 10%. The business has mainly fixed costs, with approximately 70% staff related, high scalability, is self-financed through shareholders' equity and customer deposits, has high interest rate sensitivity, and maintains a capital-efficient and low risk balance sheet.
By 2023, rising interest rates had dramatically shifted the mix: Net brokerage income dropped to 21%, Fund commissions net to 17%, Currency-related income net to 8%, while Net interest income surged to 46%, and Other income net fell to 8%.
This shift illustrates both opportunity and risk. Net interest income is highly sensitive to the interest rate environment—when rates rise, Avanza's spread between deposit costs and lending/investment income expands dramatically. When rates fall, this tailwind reverses.
Avanza's business model leans heavily on cutting-edge technology to minimize costs, allowing it to offer competitive rates and often free transactions for its users. This strategic focus on efficiency and cost-effectiveness has made it a preferred choice among retail investors who seek autonomy and straightforwardness in managing their finances.
Cost Structure & Efficiency
Avanza Bank AB operates as a direct bank without a branch network. Products and services offered by Avanza Bank AB are available via online banking and mobile application.
The branchless model is fundamental to Avanza's cost advantage. Traditional Swedish banks maintain hundreds of physical locations with corresponding real estate costs, staff, and operational complexity. Avanza's costs are concentrated in technology infrastructure and personnel—both of which scale efficiently with customer growth.
Costs are mainly fixed, with approximately 60% staff related, high scalability, self-financing through shareholders' equity and customer deposits, high-interest rate sensitivity, and a capital-efficient low risk balance sheet.
In 2024 there were 554 employees of Avanza Bank AB. Growth compared to the previous period (2023) was 6.74%.
Serving over 2.2 million customers with approximately 550 employees implies roughly 4,000 customers per employee—an efficiency ratio that would be impossible in traditional banking.
Credit Quality: The Hidden Strength
Limited on balance sheet lending SEK 28.8 billion as of 30 September 2025, with no realized credit losses for over 10 years. On balance sheet deposits SEK 91.1 billion.
This is perhaps Avanza's most underappreciated strength: a decade without realized credit losses. Limited on balance sheet lending, no realised credit losses for over 10 years.
How is this possible? Conservative underwriting. Margin lending requires collateral in listed securities with good liquidity. The mortgages are offered to private banking customers with a loan to value ratio not exceeding 50% and at least SEK 3 million in savings.
Avanza's lending products are secured by high-quality collateral at conservative loan-to-value ratios. The company doesn't engage in unsecured consumer lending or speculative real estate financing. This disciplined approach means lower credit losses but also limits lending revenue growth compared to more aggressive competitors.
Capital Position
Avanza is largely self-financed through shareholders' equity and customer deposits. Deposits are spread across a very large number of households and the majority of deposits are covered by the government deposit guarantee. Only a small share of deposits is used for lending.
The funding model is remarkably stable: customer deposits provide cheap, sticky funding, while the deposit guarantee provides implicit government backing for the majority of liabilities. The diversification across millions of households means no single customer departure—or even the departure of a significant group—would threaten funding stability.
Competitive Landscape: Avanza vs. Nordnet & Big Banks
The Nordnet Rivalry
An emerging Swedish investment platform is poised to challenge the two major players in the Swedish digital retail-focused savings sector: Avanza and Nordnet. While both Avanza and Nordnet enjoy capital-light business models, high returns on equity, and promising growth prospects, they face new challenges from emerging competition.
Currently, Nordnet has a total addressable market three times larger than Avanza's, encompassing all Nordic countries compared to Avanza's presence solely in Sweden. "Nordnet has built a more advanced tech stack (evidenced by less downtime); and, perhaps most importantly (but unquantifiable), has a culture that seemingly is an order of magnitude times more forward-leaning." Therefore, Koria finds it surprising that Nordnet has been trading at a 10 percent discount to Avanza on a forward price-to-earnings multiple despite enjoying a nearly 10 percent higher return on equity.
The Avanza-Nordnet comparison is the central competitive debate for Nordic retail finance investors.
The preference for Avanza is due to its exposure to Sweden alone, where it is also the market leader. This is expected to benefit the company, as Pareto believes that Swedish households will have relatively stronger growth in disposable income in the coming years, compared to the other Nordic countries. "Avanza also benefits from the net inflow of savings and is less dependent on net interest income compared to Nordnet."
Avanza has been named "Sweden's most satisfied savers" in 15 years running in SKI's annual survey.
Both apps and websites are user-friendly, but Avanza is often highlighted for simplicity and clarity, while Nordnet is appreciated for its community Shareville and somewhat more advanced tools.
The Emerging Montrose Threat
Perhaps the most interesting competitive development is the emergence of Montrose by Carnegie, a new platform explicitly targeting Avanza's customer base.
"Throw the recent announcement of "Montrose by Carnegie" about to launch into the mix. If its business plan had the title "how to eat Avanza's breakfast and lunch" we would not be surprised. Montrose is targeting the semi-rich and online-savvy Swedish customer group, with a team that so far largely consists of ex-Avanza employees."
Co-founders Karl Skarman and Alexander Boman - and around half of Montrose's 30-strong team - are alumni of Avanza, Sweden's dominant savings and investment platform.
Bendz was instrumental in bringing Spotify to market. Tivéus has CEO experience from Avanza and is currently CEO of Attendo. Carnegie recruited a bunch of people from Avanza last summer, including high-profile savings economist Nicklas Andersson, to work on a secret project. It was later revealed to be the investment platform Montrose. Responsible for the project are two former Avanza executives, Karl Skarman and Alexander Boman.
The talent exodus is concerning. When a company's former executives—including people who understand its strengths and weaknesses intimately—launch a competitor backed by a well-resourced parent like Carnegie, the threat is real.
The currency exchange fee at Montrose will be 0.05-0.12 percent, which it says is significantly lower than competitors. The platform will cost 0.1% and Montrose will return 100% of the fund commission.
Montrose is explicitly competing on price—attacking Avanza with the same low-cost strategy Avanza used to disrupt traditional banks. The question is whether Avanza's scale advantages, brand loyalty, and customer switching costs can withstand this assault.
Traditional Banks: A Sleeping Giant?
The big four Swedish banks—Swedbank, SEB, Handelsbanken, Nordea—remain the elephant in the room. Collectively, they still hold the majority of Swedish savings. But their digital offerings lag behind the specialist platforms, and their branch-heavy cost structures make it difficult to compete on price.
Avanza's and Nordnet's focus on savings and investments makes it difficult for traditional banks, such as SEB, Swedbank, Handelsbanken and Nordea, to compete. In recent years, more and more private small savers have chosen to move large parts of, or all of, their savings capital to Avanza or Nordnet.
The sustained migration from traditional banks to digital platforms appears structural rather than cyclical. Each generation of Swedish savers is more digitally native and more cost-conscious than the last.
Strategic Framework Analysis: The Moats and Risks
Porter's Five Forces
Threat of New Entrants: MEDIUM-HIGH The Montrose launch demonstrates that barriers to entry, while significant, are not insurmountable. Well-capitalized competitors with strong talent (like Carnegie) can build competing platforms. However, regulatory requirements (banking license, investment firm authorization) and the capital requirements for balance sheet lending create some protection.
Bargaining Power of Customers: HIGH Customers can switch between Avanza, Nordnet, and traditional banks relatively easily. The ISK account structure actually facilitates switching since customers don't need to realize capital gains to move. Avanza's response has been to create switching costs through superior user experience rather than contractual lock-in.
Bargaining Power of Suppliers: LOW Avanza's suppliers are primarily technology vendors, stock exchanges, and fund distributors. None has significant bargaining power over Avanza given the platform's scale and optionality.
Threat of Substitutes: MEDIUM Direct investing through Avanza competes with bank savings accounts (lower returns but guaranteed principal), property investment, and passive pension products. The ISK tax regime makes direct equity and fund investing relatively attractive compared to these substitutes.
Industry Rivalry: HIGH Competition between Avanza and Nordnet is intense, with both platforms competing primarily on price and user experience. The entry of Montrose and potential competitive responses from traditional banks will likely intensify rivalry further.
Hamilton Helmer's 7 Powers
Scale Economies: PRESENT Avanza's ~550 employees serving 2.2+ million customers demonstrates significant scale advantages. Marginal customer acquisition and service costs are minimal once the platform infrastructure is built.
Network Effects: LIMITED Unlike social platforms, Avanza doesn't benefit significantly from network effects. More customers don't necessarily make the product more valuable for other customers (though the Placera forum and internal order matching provide some network benefit).
Counter-Positioning: HISTORICALLY PRESENT, WEAKENING Avanza's low-cost digital model was classic counter-positioning against branch-based banks who couldn't respond without cannibalizing their existing business. However, Nordnet and Montrose can adopt the same model, weakening this advantage.
Switching Costs: MODERATE Transferring accounts requires effort and time, but isn't technically difficult. The deeper switching costs are psychological: customers familiar with Avanza's interface and tools face learning costs in moving elsewhere.
Branding: STRONG Fifteen consecutive years of customer satisfaction awards has built exceptional brand equity. Avanza is synonymous with retail investing in Sweden.
Cornered Resource: LIMITED No critical patents or exclusive resources. Talent, while excellent, can be hired away (as Montrose demonstrated).
Process Power: POTENTIAL Avanza's operational efficiency—serving thousands of customers per employee—may reflect process advantages that are difficult to replicate. However, this is difficult to assess from the outside.
Key Risks
Interest Rate Sensitivity: Net interest income now represents a significant revenue portion. A return to zero or negative rates would compress this income substantially.
Regulatory Risk: EU discussions around potential commission bans (for fund distribution) or changes to the ISK tax regime could materially impact the business model.
Competitive Intensity: The duopoly with Nordnet may be disrupted by Montrose and potential responses from traditional banks.
Single Market Concentration: 100% revenue dependency on Sweden creates geographic concentration risk. International expansion aims to address this but remains unproven.
Technology Risk: Platform outages during high-volatility periods (the company has acknowledged login issues) could damage reputation and customer trust.
Key Metrics for Ongoing Monitoring
For investors tracking Avanza's ongoing performance, three KPIs stand out as most critical:
1. Net Savings Inflow
Net savings inflow—new customer deposits plus existing customer additions minus withdrawals—is the single best indicator of Avanza's competitive position. Strong net inflows indicate the company is winning market share and maintaining customer trust. Weak or negative inflows would signal competitive challenges or broader market concerns.
In 2024, net inflow was SEK 86 billion, the second-highest ever. Track quarterly net inflow trends and market share of total Swedish savings market inflows.
2. Operating Profit Margin
Operating profit as a percentage of operating income captures the efficiency of Avanza's business model. The company targets 60%+ profit margins, reflecting its operating leverage. Margin compression could indicate rising competitive pressure (pricing), technology investment requirements, or regulatory compliance costs.
Recent profit margins have been approximately 60%, with ROE of 42%. Monitor quarterly margins and cost growth rates relative to revenue growth.
3. Customer Net Promoter Score (NPS) and SQI Rankings
The Swedish Quality Index ranking and internal NPS scores are leading indicators of future growth. Customer satisfaction drives referrals and retention. Any deterioration in these metrics could precede business performance decline.
Avanza reports an NPS of 33, versus an industry average of -31. The 15-year SQI winning streak is the ultimate proof point.
Bull Case and Bear Case
Bull Case
Structural Growth in Swedish Retail Investing Continues Sweden already has one of the world's highest retail investing participation rates, but the 2024-2026 ISK tax changes (making the first SEK 300,000 tax-free) could accelerate adoption further. As pension systems continue to shift responsibility to individuals, long-term savings growth should continue.
Private Banking and Pension Expansion Avanza has significant headroom in Private Banking and occupational pensions. "Our aim is to become market leading in Private Banking. One way to get there is to challenge and compete for the SEK 1,000 billion in traditional discretionary portfolio management." The Sigmastocks acquisition positions Avanza to capture some of this opportunity.
International Expansion The ambition is to expand abroad before the end of 2030. The goal is to grow savings capital in Sweden by an average of 15% per year and reach over SEK 2,000 billion in savings capital by 2030. If Avanza can replicate its Swedish success in other European markets, the addressable opportunity expands dramatically.
Operating Leverage Avanza's high-fixed-cost model means revenue growth flows disproportionately to profits. The platform already serves 2.2+ million customers; adding another million would require minimal incremental cost.
Brand and Trust Fifteen years of customer satisfaction leadership creates a moat that's difficult to breach. In financial services, trust takes decades to build and moments to destroy. Avanza has built it.
Bear Case
Interest Rate Reversal Net interest income now represents ~40%+ of revenues. If Swedish rates return to zero or negative territory, this income stream compresses significantly. While brokerage income might partially offset (lower rates typically boost equity valuations and trading activity), the net impact would likely be negative.
Montrose and Intensifying Competition Carnegie-backed Montrose is explicitly targeting Avanza's most valuable customers—the "semi-rich and online-savvy" segment. With ex-Avanza leadership, competitive pricing, and Carnegie's resources, Montrose represents a credible threat. "If its business plan had the title 'how to eat Avanza's breakfast and lunch' we would not be surprised."
Regulatory Risk EU discussions of commission bans on fund distribution could materially impact Avanza's fund commission revenue. In Sweden, the Swedish FSA has long sought national rules on commissions, and there is likely to be a study of their feasibility. If a commission ban was introduced, it would primarily affect Avanza's external fund business and Avanza Markets.
Single Market Dependency 100% of revenues come from Sweden—a country of 10 million people. Market saturation, economic downturn, or regulatory changes in this single market would have outsized impact. International expansion remains unproven.
Technology Execution Risk The company experienced login issues during periods of high customer activity, highlighting potential areas for improvement in platform stability. Technology reliability is existential for a digital-only bank. Repeated outages during market volatility could drive customers to competitors.
Valuation At 42% ROE and with a strong growth track record, Avanza commands a premium valuation. Any disappointment in growth rates or profitability could lead to multiple compression.
Conclusion: The Swedish Model
Avanza represents something rare in financial services: a company that has consistently prioritized customer interests while generating exceptional returns for shareholders. The "cheaper, better, simpler" mantra that Sven Hagströmer articulated at founding has proven durable across multiple market cycles, leadership transitions, and competitive challenges.
Sweden has quietly achieved what the EU still struggles to build – booming capital markets, active retail investors, thriving SME IPOs and a pension system that channels household savings into the real economy.
Avanza has been both beneficiary and driver of this Swedish financial culture. The question for investors is whether the next twenty-five years can match the last.
The company enters its next chapter with significant advantages: scale, brand, operating efficiency, and a demonstrated ability to navigate change. But it also faces genuine challenges: intensifying competition, regulatory uncertainty, interest rate sensitivity, and the strategic complexity of international expansion.
Our strategic priorities by 2030 shall support further growth, which is reflected in the target to grow savings capital with on average 15% annually. Cost efficiency is an important part of our profitability.
Fifteen percent annual savings capital growth is ambitious but not unreasonable given historical trends. Achieving it while maintaining margins in a more competitive environment will test the company's execution capabilities.
For Sven Hagströmer, now in his ninth decade as chairman of the company he founded, the vision remains unchanged: build a company you'd want to be a customer of. For Gustaf Unger and the management team, the challenge is to preserve that customer-first culture while navigating the complexities of scale, competition, and geographic expansion.
The Swedish savings revolution that Avanza helped ignite continues. Whether Avanza remains its undisputed leader depends on choices yet to be made and challenges yet to emerge. But after surviving the dot-com crash, the 2008 financial crisis, the COVID volatility, and countless market cycles, one thing is clear: underestimating Avanza has historically been a mistake.
This article is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Investors should conduct their own research and consult with qualified financial advisors before making investment decisions.
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