A research report commissioned by the Dutch regulatory authority AFM revealed that 51% of the 477 respondents to its inquiry think that the investments costs they are charged by their bank are now more transparent than before the ban on inducements was introduced, anticipating on the coming into force of the Mifid II Directive. A slightly lower number, 46%, think that the measure enables them to better compare costs charged by different providers.
Still some 38% of respondents think transparency hasn’t improved at all, while another one in 10 think it has worsened. Moreover, while one of the main goals of Mifid II is to reduce overall costs for investors, only about 10% of Dutch retail investors say their costs have decreased during the first quarter of 2014, while about a quarter say their costs are actually higher than before.
Some 44% of respondents don’t even have a clue whether the costs they pay for advice have gone up or down, possibly because such cost transparency had not been provided before. Up until December last year, clients were charged an all-in fee for advice and transaction costs combined as it is still the case in most European countries.