The Dutch Authority for the Financial Markets (AFM) has published an assessment finding that private equity finances about a quarter of the Netherlands’ 500 largest financial advice and intermediation platforms. These firms account for roughly a fifth of total revenue in the Dutch advice and intermediation market. The assessment highlights the risk that growth and return targets could outweigh service quality and customer interests as investment periods approach their end. Private equity is concentrated in insurance intermediaries, particularly in nonlife insurance, where relatively stable income and high customer retention attract investors. It has helped consolidate the market and can support operational efficiency, technological investment and business succession. However, a focus on increasing value ahead of a future sale could undermine the quality, continuity and care of customer service. Scale and profitability must not come at the expense of customer interests or sound and ethical business operations. Many transactions took place after 2019, meaning some platforms are nearing the end of their original investment periods of five to seven years. The AFM therefore expects more sales, refinancing and transfers to other private equity investors in the coming years, alongside further international consolidation. Its supervision will focus on the effects on customer interests and how firms manage the associated risks.
Dutch Authority for the Financial Markets finds private equity backs a quarter of the largest financial advice and intermediation platforms, flags risks to customer interests
An assessment by the Dutch Authority for the Financial Markets finds that private equity finances about a quarter of the Netherlands’ 500 largest financial advice and intermediation platforms, representing roughly a fifth of total market revenue. While such investment can support efficiency, innovation and succession, growth and return targets risk taking precedence over customer service. With some investment periods nearing their end, the AFM expects more ownership and financing changes and will scrutinize their effects on customers and firms’ risk management.