AFM consultation on model portfolios and execution only investment services

The useful part

On 30 September 2026, the Dutch Authority for Financial Markets (Autoriteit Financiële Markten, AFM) published a consultation on model portfolios for self-directed investing (execution only). The consultation addresses model portfolios as an innovative investment concept, including automatic rebalancing and risk reduction functionalities. According to the AFM, this service aligns with broader European initiatives which aim to increase participation of retail investors in the capital markets.

How it works

• Market participants requested the AFM to clarify whether model portfolios and functionalities such as automatic rebalancing and automatic risk reduction can be offered as part of the execution-only...
• The AFM states that in principle, this is possible, but that certain business models may straddle the lines between execution only, investment advice and individual portfolio management.
• Retail investors may develop the expectation that the investment firm provides them with investment advice or individual portfolio management.
• Therefore, investment firms should clearly explain which service is being provided, that the retail investor must make the investment decision and that the service is not tailored to the specific...
• The investment firm does not have any discretionary decision-making authority.

Details worth keeping

The retail investor takes the investment decision independently. The composition and rules of the model portfolio are determine...