Information on services and costs of financial products

Do you offer or broker financial products or services in the Netherlands, for example investments, insurances, loans, or mortgages? You have to provide correct and clear information. You must provide this information before you close a deal. The Dutch Authority for the Financial Markets (Autoriteit Financiële Markten, AFM) supervises these products and services in the Netherlands.

Information on financial products and services

The information you provide to customers must comply with the Financial Supervision Act (Wet op het financieel toezicht, Wft). This applies for example to offers, product information folders and advertising. The information must be correct, complete and comprehensible, and may not be misleading.

It is important that your customer can make an informed decision based on the information about a financial product or service. It must also be clear that this information is aimed at selling the financial product or service. The AFM specifies the requirements per product and service (in Dutch).

Duty of care

Are you a financial adviser, mediator, or agent? You have a duty of care for your customers (in Dutch). For example, you have to:

• regularly check if your product still fits your client’s situation
• notify your client immediately if there are changes in the product or contract information

In case of abuse AFM can intervene and impose sanctions.

Inform your customer with the Essential information document Eid

For many financial products and other investments and insurance products with investment elements (Packaged Retail and Insurance-based Investment Products, PRIIP) an Essential information document (Eid) is mandatory (in Dutch). With an Eid you inform your customer on, among others, the risks, expenses, and expected returns. An Eid helps your customer understand and compare the products you offer. You must supply you client with the Eid before you conclude the contract.

Offering investment-linked insurances

Do you sell investment-linked insurance policies (investing money through insurance, in Dutch)? Then you must meet several requirements. For example, you must:

• make sure your clients understand their own situation
• give your clients information about the results and offer possible chances for improvement, if there are any
• offer your clients the choice to either end, change, or continue their policy

Offering loans

Do you offer loans (credit)(in Dutch)? You must inform your clients about the credit conditions and costs before concluding the credit agreement. Your client can still cancel the credit agreement without stating reasons within 14 days. Your client may also cancel the agreement if you included a condition in the agreement that you did not mention in advance. 

Offering mortgages

Do you offer mortgages? You must offer clear information and appropriate advice (in Dutch). For example, you have to explain the structure of the variable interest rate to your client. You must do this before concluding the mortgage. Providing appropriate advice means, among other things, that you must assess whether the mortgage is suitable and sound for the customer.

If the fixed-interest period is set to expire, you must make a new offer at least 3 months in advance.

Comparison document and ban on commissions

Commission is money that an adviser gets from a bank or insurer as a remuneration for the products they sell to a customer. For a number of products, this is no longer allowed. A so-called ban on commissions applies to those products (in Dutch).

Do you give advice about, or do you sell financial products that are subject to the ban on commissions? You have to provide a comparison document (Vergelijkingskaart in Dutch) to your clients. With this document consumers can easily compare services and costs. 

Prospectus

Do you want to offer transferable securities, such as shares and bonds, to the public? Or do you want to trade them on a regulated market? In most cases you will have to publish a prospectus. Your prospectus will set out the terms of the issue. The prospectus has to be approved by the AFM.