The effects of compensationon the quality of financial advice: The case of the closing provision

  • Jurgen van Boxtel Jurgen van Boxtel

This paper discusses the effect of compensation on the quality of financial advice. From personal experience working at Zwitserleven, the ban on closing provision is discussed as a practical case.From the literature it becomes clear that the discussion is highly technical and that based on the literature alone it is hard to draw a conclusion. Empirical evidence seems to indicate that the lowerthe provision the intermediary receives, in general the higher the quality of financial advice is. And that therefore the change from closing provision to continuing provision to a fee-based system islikely to improve the future quality of financial advice. However, for financial intermediaries working today the future may still seem very uncertain.

Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.

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