DIN 77230

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The DIN 77230 basic financial analysis for private households is the first German standard for financial services. It describes an objective, reproducible and transparent analysis process that enables a holistic view of the financial situation of private households .

Starting position

Since the beginning of the 2000s, there has been an increasing number of reports of financial losses caused by private households. The causes of incorrect advice range from inadequate training of consultants to the brokering of unsuitable products for customer needs to non-transparent or guided by corporate interests. At the same time, due to the decreasing benefits of the statutory pension systems, the need for advice on personal provision, e.g. B. for covering the longevity risk . The legislator took a number of regulatory measures, including Directive 2004/39 / EC on Markets in Financial Instruments (MiFID), which covered individual areas such as investment advice. Before that, there was no holistic view of the financial situation of private households.

Development of DIN 77230

On this occasion, the DEFINO Institute for Financial Standards applied for DIN standard 77230 in 2014. The working committee, consisting of representatives of consumer protection, science and the financial sector, which came together after a public tender by the German Institute for Standardization , started its work in November 2014. On November 27, 2018, the standard was passed unanimously by consensus of all representatives and published on January 18, 2019. The standard replaces DIN SPEC 77222: 2014-04 and DIN SPEC 77222 / A1: 2017-11.

aims

The aim of DIN 77230 is the definition of an objectifiable, reproducible and transparent analysis process. The standard deliberately separates financial analysis (in comparison with medicine "diagnosis") from any subsequent financial advice (in comparison with medicine "therapy" / "treatment").

Due to the budget restriction of private households - especially in the case of subsequent financial advice - the comprehensible visualization of the possible risks and necessities of a private household and the recommended level of protection are of central importance as an orientation aid.

Only on this basis can financial advice in terms of the search for individual solutions for the financial issues considered important by the customer

  1. the best possible protection against life risks based on private finances,
  2. a forward-looking design of the financial future through appropriate asset planning and
  3. an orientation towards the needs and objectives of the private household

guaranteed.

DIN 77230 in detail

Methodical approach

The basic financial analysis of DIN 77230 can be used for all private households within the meaning of the standard. As part of the analysis, the financial topics that are individually relevant for the budget are determined from a total of 42 financial topics. The financial topics have a fixed ranking and are presented over three levels of need.

  • Requirement level 1: Securing basic financial needs - The most important financial issues and an initial security or provision
  • Requirement level 2: Maintaining the standard of living - Other important financial issues and insurance and provision based on the current standard of living
  • Need level 3: Improvement of the standard of living - savings goals, e.g. creation of property in order to improve the current standard of living

Framework parameters and data acquisition

For the basic financial analysis, fixed parameters (for example the inflation rate ) are to be used for calculations that are specified in the standard and updated regularly or can be determined by the users themselves using the sources specified in the standard.

The standard also defines the minimum household data to be recorded that is required to

  1. the income and expenditure account and the balance sheet
  2. the relevant financial topics
  3. the benchmarks (recommended level of coverage and provision or necessary assets / savings)
  4. the actual values ​​(existing security and pension level or existing assets / savings processes)

to investigate.

Results overview

In addition to the income and expenditure account and the balance sheet, the central element of the presentation of the results is the overview of the financial topics relevant to private households. The presentation of these financial topics must be complete, must be based on the levels of need and the order of priority and must at least include the benchmark.

Relevance of the norm

The standardization of the financial analysis process makes the analysis result independent of the consultant or institute performing the analysis. The basic financial analysis according to the standard enables consumers to use financial advice based on the analysis in a more conscious and informed manner.

In particular, the defined ranking of the financial topics and the orientation values ​​determined with the help of defined framework parameters and calculation methods are suitable for counteracting false incentives among consultants and thus incorrect advice. With the help of the overview of the results of the basic financial analysis, the consumer can more easily compare the advice given, his own goals and the advice of the adviser.

Dr. Erich Paetz, head of consumer policy in the area of ​​financial services in the Federal Ministry of Justice and Consumer Protection (BMJV), explained that the analysis based on the standard can only be one component for consumer-oriented financial advice, but incorrect advice solely through the standard could not be prevented.

The Federal Association of German Insurance Brokers criticized the standard because its purpose was only to record the initial financial situation, but would not determine more precisely which recommendation would be appropriate for which budget goal for households with low incomes.

The application of the standard is voluntary. However, standards are complementary to the law and can serve as so-called "anticipated reports" in court.

Certification

In all industries in which DIN standards are relevant, it is common practice for companies, their processes or products and the employees who handle the processes or products to have themselves certified for working in accordance with the standard. Also with reference to DIN 77230, providers of analysis software or financial advisors and companies can be certified for full DIN conformity by a certification organization.

Individual evidence

  1. ↑ DIN 77230 - 2019-02 - Beuth.de. Retrieved May 21, 2019 .
  2. ↑ Financial advisors almost always give wrong tips. Berliner Morgenpost, December 22, 2008, accessed on May 28, 2019 .
  3. ↑ DIN 77230 is about to start. In: AssCompact. January 31, 2019, accessed May 28, 2019 .
  4. ^ First German standard for financial services. DIN e. V., January 9, 2019, accessed May 21, 2019 .
  5. ↑ n-tv NEWS: Norm ensures transparency in investment advice . Retrieved May 23, 2019 .
  6. ↑ What DIN 77230 brings to financial advice. In: t-online.de. February 7, 2019, accessed May 28, 2019 .
  7. ^ Commission cover: Sharp criticism of the BDVM against the Ministry of Finance. In: AssCompact. May 6, 2019, accessed May 25, 2019 .
  8. ^ Elke Pohl: DIN working committee adopts standard 77230. In: Versicherungsmagazin. November 30, 2018, accessed May 25, 2019 .
  9. ↑ "The only instrument against externally determined regulation". In: Peppermint. February 26, 2019, accessed February 28, 2019 .