Commission-based selling of financial products banned in the Netherlands and the UK
Dutch buy-side major ING Investment Management has launched FitVermogen, an online platform allowing retail investors to access the firm’s equity, bond, real estate and multi-asset products, with fees calculated at 50-70 basis points of underlying funds, according to the Financial Times.
This comes after the Dutch government put an end to the commission practice prevailing between asset management firms and the financial advisers distributing their products.
The asset manager aims to extend the platform to other countries such as Italy and Belgium, though there is currently no plan to extend it to the UK, where an equivalent ban on ‘trail commissions’ came into force on January 1.
The Financial Conduct Authority's retail distribution review now requires financial advisers to charge consulting fees directly to clients instead of receiving commissions from their suppliers, a change in business model that is anticipated to trigger a major shake-up of the investment industry.
Several execution-only platforms have recently been launched by UK advisers ‒ Bestinvest, Plan Money and Informed Choice, to name just three ‒ while new websites offering discretionary investment management services, such as Nutmeg and rplan, have attracted retail customers with their reduced fees and low investment threshold.
Dutch investors, however, are renowned for their conservativeness and are unlikely to massively change into DIY investors overnight, with only 20 percent of them reportedly comfortable with managing their own portfolio.
Candice de Monts-Petit
Candice de Monts-Petit joined IR Magazine as a senior editor in 2012. Prior to this, she worked in investor relations, first as an IRO for oil and gas firms in Paris and Moscow and subsequently as an IR consultant in London. She graduated in business...
