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Norwegian FSA needs clear definition of "value-adding", Morningstar analyst argues

As part of MiFID II, Norwegian fund managers, like the rest of Europa, must have value-adding services to receive commissions from others than the customers. The Norwegian FSA, however, has yet to give a clear definition of what "value-adding" means.

Thomas Furuseth, Analyst and Editor of Morningstar.no | Photo: PR: Morningstar

The Financial Supervisory Authority of Norway (FSA) has stated that the Norwegian investment firms must add value to receive compensations from others than their customers. This is also known as kickbacks. This is a consequence of MiFID II.

However, the FSA has no clear definition of what "value-adding" means, according Thomas Furuseth, analyst at research firm Morningstar:

"In my opinion it's difficult to interpret "investment firms must add value". Most firms have defined themselves as value-adding, but offer the same level of service, similar product offerings and use a platform that offer mutual funds. Should that be considered sufficient as value adding? I'm a bit uncertain," he says.

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