"Trust needs to return to the market"

“To overcome the current financial crisis, trust needs to return to the market. And the financial sector itself needs to take the initiative.”

The credit crisis has dramatically changed the Dutch financial world in recent months. The Dutch government acted swiftly and resolutely to nationalise Fortis Netherlands, including ABN AMRO Bank, inject capital into ING, Aegon and SNS Reaal and provide various guarantees to safeguard the future of our financial system.

“Restoring trust to the financial sector as quickly as possible is crucial for the near-term future,” says Niek Hoek, Chief Executive of Delta Lloyd Group. “It’s up to the financial sector itself to take the initiative, and the focus should be on ensuring long-term trust and continuity rather than short-term profits. Financial institutions also need to be more aware that it’s not our own money we’re working with. It belongs to our clients.”

How do we protect our clients’ money? As Niek Hoek explains, “Most of our equity investments are in the Netherlands; that avoids exchange rate risks. Our motto is ‘Invest in large Dutch companies that you understand’. We don’t, for example, invest in large, listed property companies, but instead in rental properties, smaller offices and shops. And we’ve been doing that for the past forty years. We found out in the dotcom crisis in 2001 and 2002 how important it was to make sure your shareholders' equity was well protected. And that’s exactly what we’ve been doing over the past few years.”

What does trust actually mean? The dictionary gives various examples, including words such as confidence and belief in or reliance on something, to hope and be credible. But how we can put these words into meaningful practice and generate more trust? In our view, the recommendations of the International Institute of Finance point the way. We will obviously continue complying with all the applicable codes of conduct and guidelines, while we also have to ensure that risk management becomes even more firmly embedded in our business activities. Delta Lloyd Group is striving to ensure that the products it offers are even more transparent. Another important core value is ensuring we have a transparent commercial relationship with, for example, intermediaries, and a relationship that is based on integrity. At the same time we will also push for AFM supervision to be extended to investment products above € 50,000. Once all these aspects have been properly balanced, we will be able to focus all our energies on working towards a strong future.