Shedding Light on Non-Financial Risks – a European Survey

Shedding Light on Non-Financial Risks – a European Survey — January 2012

4. The (Fair?) Cost of Protection

4.3. Costs Passed to Clients Statistics are as follows:

to charge something and 20% to charge a lot.

•  Regarding transparency, information and governance, 42% of respondents are not willing to charge anything, 47% are ready to charge something and 11% to charge a lot. •  Regarding the financial responsibility of the industry, 43% of respondents are not willing to charge anything, 41% are ready to charge something and 16% to charge a lot. •  Regarding regulation on distribution, 53% of respondents are not willing to charge anything, 37% are ready to charge something and 10% to charge a lot. •  Finally, regarding stricter obligations of restitution, 44% of respondents are not willing to charge anything, 35% are ready

Country-by-country figures (see figure 4.3.2) mirror those of the willingness- to-pay. Luxembourg and Ireland also appear to be significantly less willing to charge for the regulation on the financial responsibility of the industry. Responses also differ according to the type of firm, with pension funds less willing to charge for regulation than their peers (especially for the regulation on distribution and for the financial industry), and AM servicing companies more willing to charge for restitution and transparency than their peers.

Figure 4.3.1: How much are you willing to charge for greater protection?

Figure 4.3.2: Country group average of willingness to charge for protection How much are you willing to pay for greater protection?

“Fr” is France, “UK” is the United Kingdom, “Ge+Au+Nl” is Germany, Austria and the Netherlands, “Lux+Irl” is Luxembourg and Ireland, and “RoE” is the rest of Europe. Answers are coded in the following manner: 0 for 0, 1 for +, 2 for ++.

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An EDHEC-Risk Institute Publication