Private equity finances a quarter of big Dutch financial advisers

About a quarter of the 500 largest financial advice and intermediary platforms in the Netherlands are financed by private equity, a survey by the AFM shows. Together these firms account for about a quarter of the top 500's combined turnover and about a fifth of turnover in the whole Dutch advice and intermediary market.

Private equity is mainly active among insurance intermediaries, especially in non-life insurance (schade). Its involvement ranges from full ownership to minority stakes and other financing structures.

A large share of the deals took place after 2019. For some platforms the original investment period of five to seven years is therefore nearing its end. The AFM expects more changes in ownership and financing in the coming years, such as a sale, refinancing or a transfer to another private equity party. It says further international consolidation is likely.

The AFM says private equity can bring scale, innovation and solutions for succession.

It also sees a risk. Growth and return targets may then weigh more heavily than the quality, continuity and care of services, the AFM says.

The AFM says scaling up and returns must not come at the expense of customers' interests or of ethical and well-managed business practice. It will keep monitoring developments and, as part of its supervision, look at the effects on customers and at how firms manage the risks.