14% of savings policies charge too much

Some 14% of investment products have excessive costs attached to them and in 5% of cases at least half of the premium goes on charges, according to research by the financial services watchdog AFM, quoted in Trouw.

Finance minister Wouter Bos commissioned the study after it emerged that hundreds of thousands of savers have been duped by massive costs and agency fees. Some 6.5 million so-called woekerpolissen (profiteering policies) have been sold.
However, the AFM said the market for investment-based policies was so diverse that it was impossible to draw general conclusions.
Poor advice and consumer naivety also played a role in the scandal, AFM chairman Hans Hoogervoorst was reported as saying in the Telegraaf.
Overcharged
Costs are considered to be too high if they account for more than 3% of the basic premium. Fees and other charges amounted to an average of 8% of the premium paid on policies which are considered to have overcharged.
The financial products ombudsman said earlier this year that fees should not amount to more than 2.5% of the premium.
A number of financial services groups are already in talks with consumer organisations about compensation because of the too-high fees. Delta Lloyd has agreed to a €300m deal.
One foundation representing 75,000 policy-holders said insurance agents should also pay compensation. In an earlier report, the AFM said a quarter of agents had given their clients bad advice.