The AFM is positive about the proposal of the Dutch Banking Association (NVB) and the banks to provide more insight into the costs of investments, in anticipation of the European proposals in this area in MIFID II / PRIPS.
The banks indicate that on 01 January 2015 they will introduce cost transparency at draft level prior to providing services. That means insight for all investors with a certain profile concerning the costs they can expect. The NVB and the banks have also indicated that in the coming year they will be working on providing insight into the actual costs (ex post) at the individual level of their own services and the continuous costs of the products in the client's portfolio.
The comparative cost standard (CCS) contains in any event the own costs of the services provided by the banks plus the costs of products (mandatory in the Essential Investor Information (EII)) that already must be made transparent. The AFM understands that banks are not yet able to provide full insight into the individual costs. It is important and good that the banks have taken this first step. The AFM does consider it important that fund providers also take steps by thinking about the manner in which they can provide insight into the trade/transaction costs.
The AFM wishes to emphasise that costs are important for the long-term investment result and is of the opinion that insight into these costs must be provided. But focusing merely on the costs is too limited. Clients must be able to make a well-considered choice for a specific type of investment service and/or investment product on the basis of insight into the costs combined with insight into risk and return.
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.