Mifid II rules banning commission payments have led to some DKK311bn (€41.7bn) of assets shifting to so-called ‘clean funds’ according to analysis published by the Danish Financial Supervisory Authority (Finanstilsynet).
However, while commission payments may have fallen by around DKK1.6bn (€214m) as a result of Mifid II, end customers have not necessarily benefitted from a shift to paying fees. The FSA says that its analysis suggests that when VAT and other tax is added, the total end cost to investors has remained the same.
Mifid II is leading to other consequences the Danish FSA added. Some 15% of retail investors’ total assets have been shifted from solutions that are encompassed by the ban on commission to being invested via other services, where financial institutions may still be able to receive commission. This is particularly the case for customers with lower levels of invested wealth, it said.
“The ban on commission [as looked at for this study] does not apply when the customer invests on the basis of investment advice or via internet banks. Here there is a requirement that commission payment should be matched to the quality of the service that the customer receives from the financial institution. This is a theme we will look closer at in a following investigation in the autumn,” said Ove Feddersen, director, Investor Protection at the Danish FSA.
The full report on the impact of a commission ban is available in Danish here: https://www.finanstilsynet.dk/~/media/Nyhedscenter/2018/Temaundersogelse-om-provisionsforbuddets-konsekvenser.pdf?la=da