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AFM imposes an administrative fine on Gooisch Effectenhuis for failing to obtain sufficient information when performing wealth consultancy and management

Measure

Fine

On 10 September 2015, the Netherlands Authority for the Financial Markets (AFM) imposed an administrative fine of €31,250 on Gooisch Effectenhuis B.V.

 
States of the legal proceedings

Fine imposed Objection Appeal Further appeal
Submitted Decision rendered Submitted Decisiion rendered Submitted Decision rendered

10-09-2015 22-10-2015 (1)  

(1) The notice of objection against the administrative fine has been withdrawn. As a result the administrative fine has become final on January 5th, 2016.

The fine was imposed because Gooisch Effectenhuis failed to obtain sufficient client data when issuing advice and when performing wealth management. Consequently, it was unable to determine whether its advice or management was appropriate for the client's situation. This means that it infringed Section 4:23, first subsection, of the Financial Supervision Act (Wft).

Section 4:23, first subsection, part a, of the Wft provides that a financial service provider gathers information in the interest of the client concerning the client's knowledge and experience, objectives, financial position and risk acceptance, to the extent that it is reasonably relevant for the advice or wealth management. This information should enable the investment firm to determine that transactions comply with the client's investment objectives, that the client is financially able to bear the related investment risks and that the client understands these investment risks.

The AFM investigated ten Gooisch Effectenhuis client files and determined that Gooisch Effectenhuis failed to obtain sufficient information in all of these files during the period from 1 January up to and including 30 April 2013. For example, specific information concerning the knowledge and experience, objectives and/or the financial position of clients was lacking. None of the files contained sufficient information concerning the clients' risk acceptance. Moreover, the client information is often 5 to 6 years old and not in line with new circumstances. These defects are serious, because only sufficient client information can be used to determine what investment objective is envisaged by the client and whether he understands and accepts the investments risks and can also bear these financially.

Amount of the fine

Violation of Section 4:23 Wft is subject to basic fine amount of €500,000. This amount can be increased or decreased depending on whether the seriousness or duration of the infringement or the degree of culpability give reason to do so. When determining the amount of the fine, the AFM also takes into account the equity and the financial capacity of the offender. The AFM concludes on the basis thereof that an amount of €31,250 is appropriate for Gooisch Effectenhuis' violation.

Interested parties can submit the AFM's decision to the courts for review. If you have questions or complaints, please contact the AFM's Financial Markets Information Line: 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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