AFM informs banks and insurers about compliance with the cost price model

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The Netherlands Authority for the Financial Markets (AFM) has informed banks and insurers about the findings of a request for information concerning compliance with the ban on commissions.

The findings provide a first indication of the points for attention relating to the direct charging of advisory and distribution costs to consumers. They also raise questions, and it is likely that adjustments will be necessary in some cases. That is why the AFM will deal in greater detail with the findings during follow-up meetings with a number of providers.

The aim of the request for information was to obtain a first insight into the application of the so-called ‘cost price model’. Banks and insurers use this model to calculate their advisory and distribution costs for financial products that come under the ban on commissions. The advisory and distribution costs must be stated in the Financial Services Document. This will allow consumers to make a comparison between the advisory and distribution costs of banks and insurers, and the costs charged by independent advisors and brokers. An external auditor has to check the cost price model of the direct provider.

The request for information was sent to eighteen banks and insurers. The AFM has provided an overview of the main findings and points for attention that follow from the responses to the request for information, which overview has been included in a feedback letter. These findings and points for attention are relevant for the entire financial market, which is why the AFM has published the letter on its website. The AFM requests providers to make an assessment, on the basis of these findings, as to whether their cost price model needs to be adjusted, and to do so if necessary.

The responses to the request for information show that all providers use the cost price model to calculate the advisory and distribution costs. The responses to the request for information raise questions about, inter alia, the completeness of the cost price model that is used, for example with respect to the processing of advertising costs. These subjects will be discussed further in follow-up meetings with a number of providers.

The check performed by an external auditor is essential for a more thorough assessment of the application of the cost price model. That is why it is important that accountants now actually start performing this check. The report on the check performed by the accountants will become available to the AFM towards the end of October. The AFM will continue to closely monitor compliance with the cost price model.


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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