Providers make a reasonable start with the cost-plus pricing model

News This news is older than 3 years. Therefore it is possible that the information is no longer valid.

This year, banks and insurers have made a reasonable start with the cost-plus pricing model, which they use to charge the consultancy and distribution costs separately to consumers. This is concluded by the Netherlands Authority for the Financial Markets (AFM).

The cost-plus pricing model is an open standard, which was announced relatively late to the market. Market participants understandably had to search for a proper implementation of this standard.

During the first half of the year, the AFM sent a request for information to banks and insurers, which highlighted several key considerations. In September, the AFM then discussed the results of the request for information with several market parties. The supervisor also received reports drawn up by accountants pursuant to their audits of the cost-plus pricing models. Most market participants implemented changes in their cost-plus pricing model on the basis of the information referred to above.

Further improvements

There is still room for further improvement of the cost-plus pricing models. In some cases, this may lead to adjustment of the rates. In a second letter sent last week, the AFM provided banks and insurers with a further explanation of these key considerations.

Providers are required to use the key considerations and the findings of the accountants to assess whether the cost-plus pricing model and/or the calculation of consultancy costs for 2014 have to be adjusted. The supervisor calls on market participants to implement the changes that have been requested as soon as possible, and, where necessary, to adjust the rates for 2014 accordingly.


The substantive and critical view of the external auditor of the application of the cost-plus pricing model enables the AFM to maintain supervision of the cost-plus pricing model in the future as well. The AFM determines whether this subject requires further attention on the basis of this audit of the calculation of the rates for 2014.

Why a cost-plus pricing model?

Banks and insurers use the cost-plus pricing model to calculate their consultancy and distribution costs for financial products that come under the ban on commissions. The consultancy and distribution costs must be stated in the Financial Services Document. This allows consumers to make a comparison between the consultancy and distribution costs of banks and insurers and the costs charged by independent advisors and brokers. An external auditor has to check the cost-plus pricing model of the direct provider.

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.

Share information

Share on: Share this