NETHERLANDS - The Dutch financial communications watchdog, the Financial Markets Authority (AFM), has argued the expertise requirements of pension advisers must be tightened as their overall quality of advice is sub-standard.
Just 25% of the advice given to small and medium-sized employers was considered to be of an acceptable level, the AFM found during an investigation into the quality of pensions advice.
The communications regulator said at least 31% of the advice given was so bad that it is considering "formal measures", such as fines, against the advisers involved.
Its evidence found pension advisers often failed to gather sufficient information on the financial position of employers, as well as their willingness to take risks, the aims and expertise of the employers, while subsequent advice often then failed to match the information available.
"In addition, the information about the employers and the subsequent pension insurance is not laid down structurally, so it cannot be proven that the issued advice fits the employer's situation," the AFM noted.
The AFM attributed these problems to a lack of routine among pension advisers, as well to limited expertise requirements.
The regulator said it is in consultations with the Dutch finance ministry about extending the Financial Supervision Act (Wft) and adding demands for knowledge.
It has also asked pension insurers to ensure their advisers are up to the job and have been supplied with sufficient information on their pension products.
The supervisor said its investigation involved 42 pension dossiers - with an average 34 workers participating in each case - at 16 pension advisers.
Its investigation focused on advice related to insured arrangements through pension advisers.
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