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AFM fines De Pensioenplanner for not ensuring professional competence

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On 19 March 2012, the Netherlands Authority for the Financial Markets (the AFM) imposed an administrative penalty of €130,000 on De Pensioenplanner B.V. (Pensioenplanner) . The penalty was imposed because in the period between 1 March 2010 and 28 March 2011, Pensioenplanner failed to ensure that the persons acting under its responsibility as intermediaries for life insurance were professionally competent to do so.

By law, a financial services provider must ensure that its employees directly involved in the provision of financial services to consumers are professionally competent. Among other things, this means that at least a sufficient number of people employed at a financial enterprise must be professionally competent and have up-to-date knowledge of their field. This is important because consumers must be able to rely on the expertise of financial services providers. It is the opinion of the AFM that Pensioenplanner has failed in this respect.

The AFM has established that only two of the persons designated by Pensioenplanner as de facto managers actually possessed the relevant qualifications and Permanent Education points. During the period of the investigation, Pensioenplanner had a total of approximately 100 employees involved in the provision of financial services. Neither the 15 cases from this period that were reviewed, nor the business model established by Pensioenplanner to ensure that standards of professional competence are maintained within the company indicate any involvement by the two persons with appropriate qualifications in the advice given by other Pensioenplanner employees. The advice given by Pensioenplanner was therefore not checked and verified by a professionally qualified manager.

The AFM moreover takes the view that in the conduct of its business, Pensioenplanner did not have an adequate system or adequate procedures put in place to enable professionally qualified de facto managers to exercise their duties properly and in practice, and thus to contribute to ensuring the maintenance of professional competence. Pensioenplanner therefore contravened Section 4:9 (2) of the Financial Supervision Act (or ‘Wft’).

Statutory requirements regarding professional competence

There are two ways in which a financial services provider can ensure that a satisfactory level of expertise is maintained within the firm. A financial services provider can ensure that all employees directly involved in the provision of financial services obtain all the diplomas relevant to their work as described in the Wft (‘the diploma model’).

A firm may also choose to operate its business in such a way as to ensure that the service provided is professionally competent (‘the business operation model’). Pensioenplanner chose the business operation model and the deployment of de facto managers. In a business operation model supported by de facto managers, where it may be the case that unqualified employees are giving advice, it is particularly essential that the role of the de facto managers who do have the appropriate qualifications is defined in terms that are clear, understandable and observable. In order to make up for the lack of expertise of the unqualified staff, they must be involved in the advisory process.

The penalty

The basic penalty for contravention of Section 4:9 (2) Wft is €500,000. In setting the penalty in this case, the AFM has taken account of the seriousness and duration of the offence, and of the culpability and financial capacity of Pensioenplanner.

Pensioenplanner filed for bankruptcy on 31 January 2012. The AFM is imposing the penalty because the offence dates from the period of 1 March 2010 to 28 March 2011, during which time Pensioenplanner was still operating as a financial services provider. In response to questions from the media, the AFM had previously announced that it would be investigating Pensioenplanner and several aspects of its service provision. This penalty is the result of part of that investigation, and the entire investigation of Pensioenplanner is now complete.

Pensioenplanner has not filed an objection to the decision, and the penalty is therefore final. With this publication, the AFM fulfils its duty to publish the imposition of the penalty pursuant to Section 1:98 Wft.

If you have any questions or complaints you can contact the AFM Financial Markets Information Line on 0800-5400 540 (free of charge).

The AFM is committed to promoting fair and transparent financial markets.

As an independent market conduct authority, we contribute to a sustainable financial system and prosperity in the Netherlands.

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