Financial service advisors fear effect of commission ban
Banks, insurance companies and financial advisors fear the impending ban on commission will lead to consumers buying products they do not understand, the Financieele Dagblad reports on Monday.
From January 1, insurance agents will no longer be paid commission by banks and insurance companies on each mortgage, life insurance and funeral insurance policy they sell. Instead they will have to charge consumers for their advice.
Rabobank’s Rik op den Brouw told the paper there is a risk the price of advice will lead consumers to ‘do it themselves’.
Matthijs Mons, partner with IG&H Consulting, says people will either avoid such policies altogether or try and save on costs by buying a policy without advice. Another advisor told the FD advice on a single premium annuity would cost between €1,000 and €1,500.
The aim of the legislation, which still has to be approved by the upper house of parliament, is to improve the quality of financial advice to consumers.
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