Risk & Compliance

Advise = inform

When the Dutch AFM published its interpretation on advice and information in late 2021, it did not go unnoticed. ‘Major concerns’ were expressed from the advice industry about this interpretation. For example, this interpretation would possibly create financial risks for consumers and changes to an existing contract could be made by non-expert employees. In its 2023 agenda, the regulator already announced that it was in discussion with the sector about this interpretation, and that it was awaiting the results of a study on the consequences and advice needs of consumers. Recently, the Dutch minister of finance published the conclusion based on the results of two studies.

Date:November 3, 2023

Research reports on financial advice

The minister concludes that there is no reason to amend financial supervision legislation. Personal advice during the term of the product (the management phase) does not fall under the Financial Supervision Act (Wft), provided that no new financial product is concluded. And so that remains the case. With this outcome, it remains possible for providers to guide consumers in the management phase with choices they must or can make. 


In the first study, providers communicated with customers in the management phase in four different ways. However, it did not show that consumers sought advice more often or made wiser choices as a result. The second study found that the need for advice did not depend on consumers’ financial literacy. One interesting finding was that consumers were less likely to be guided by their own knowledge if feedback from a financial literacy test showed that they overestimated that knowledge. The feedback then did not result in a greater willingness to seek financial advice. This study thus shows that a good knowledge test in execution only with feedback can make an important contribution to consumer protection and has an impact on consumer behavior. 


The fact that the regulator has no legal powers in the management phase obviously does not mean that “informing” should not (also) take place carefully and competently. After all, civil law, through the Civil Code, also sets requirements for the provision of services. The starting point that the advisory rules from the Wft do not apply to personal advice in the context of financial products already purchased, does not affect the fact that the civil judge and the Financial Services Complaints Institute will expect a reasonably acting and competent advisor to take into account the necessary information in order to be able to provide sound advice. Existing legal standards will therefore continue to apply, although the financial service provider will not be able to be held accountable for this by the regulator.

Want to learn more?

For questions about the information above, please feel free to get in touch.