AFM: Dutch providers and advisers comply with ban on inducements
More than two years following the introduction of the ban on inducements in the Netherlands, the majority of banks, insurers and independent advisers tend to comply with the new regulation, a report by Dutch regulator Autoriteit Financiële Markten (AFM) states.
The Dutch ban on inducements was introduced in January 2013 and applies to complex products such as mortgages and life insurances, consumers now pay their advisers directly for the mediation of these products.
The AFM conducted a spot check on the compliance with these guidelines including 53 medium sized advisers, nine providers and four service providers. The AFM concluded that banks and insurers are no longer paying inducements in the traditional sense and that the vast majority of providers now avoids agreements which contain a risk of guidance.
Michiel Denkers, head of supervision at AFM comments: “The ban on inducements is a key requirement in order to ensure that independent advisers prioritise clients needs. Ahead of a broader evaluation on the impact of the ban on inducements it is important to ensure that market participants comply with it. It is great to see that this is the case, especially considering that the introduction of the ban on inducements has required a lot of adaptation from all parties.”
While the current report focused exclusively on the enforcement of the ban on inducements, a broader review on the long-term impact of the ban will be conducted in 2017.
A Europe-wide ban on inducements has been discussed as a potential clause in Mifid II but is strongly criticised by industry organisations such as the German BVI (Deutscher Fondsverband).