Financial advisor

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This article or paragraph presents the situation in Germany . Help us to describe the situation in other countries.

Financial advisors (including Financial Advisor ) is the job title for a service provider that customers about investments , loans or insurance advice. This advice is provided either on a case-by-case basis or as part of structured financial planning. At the end of the consultation, one or more financial products can often be arranged.

Financial advisors are self-employed or work as employees . Self-employed financial advisors are often contractually bound to providers of financial products, such as banks or insurance companies , or to financial distributors .

Designation and approval

The term financial advisor, unlike that of insurance advisor, is not protected by law. Insofar as the advice affects legal or tax aspects, the financial advisor must observe the limits of the Legal Advice Act and the Tax Advisory Act . However, legal or tax advice is permitted to a limited extent if it is directly related to the activity. The type of approval depends on the product groups in which he advises or mediates. Business registration is the basis for self-employment .

Job titles

There are various job titles that fall under the term financial advisor. These include the following statutory professions that require authorization:

There are also the following job titles that are not subject to any legal protection and can be used by anyone:

Financial advice on loans

The brokerage of loans is subject to a special business license in Germany. It is granted if you can prove that you have the necessary reliability and that you live in an orderly financial situation, i.e., in particular, that you have not been convicted of a relevant criminal offense in the last five years, nor that insolvency proceedings have been opened against the assets. The self-employed must observe the regulations of the broker and property developer ordinance.

Financial advice on insurance

A special business license is also required for approval as an insurance broker or insurance advisor. It is granted if

  • the required reliability exists,
  • orderly financial circumstances exist,
  • adequate professional liability insurance has been taken out and
  • the necessary expertise has been proven by an expertise examination taken at the Chamber of Industry and Commerce (designation: certified insurance specialist IHK ) or by other qualifying degrees.

Insurance intermediaries who are exclusively tied to an insurance company and for whom the insurer also assumes liability do not require such a permit and therefore do not have to separately prove their expertise. The insurance intermediaries are entered in a special register at the Chamber of Commerce and Industry.

Financial advice on investment products

In order to be able to advise on investment products or to be able to broker them, one generally needs approval as a financial services institution for investment advice or fee-based investment advice according to the German Banking Act . However, there are exceptions for certain products that are essential for private customers. This includes in particular open-ended investment funds , investments in closed-end funds and investments . In order to be able to broker this, a business license according to the same regulation as for loan brokers was sufficient until 2013.

The law on the amendment of the financial investment brokerage and asset investment law regulates the activities and permits with effect from January 1, 2013 and introduces a permit regulation (§ 34f GewO). The federal government promised to strengthen consumer protection through the amendment. Similar to the insurance brokerage, from now on the expertise and professional liability insurance must be proven. The details are set out in the Financial Investment Brokerage Ordinance (FinVermV).

Since August 1, 2014 there has also been admission as a fee-based financial investment advisor in accordance with § 34h GewO. Fee-based financial investment advisors only advise against a fee and are not allowed to take any commissions, so that independence is legally guaranteed for these advisors.

Financial investment brokers and fee financial investment advisors must acc. 24 FinVermV to be audited annually and to send the audit report to the supervisory authority. The audit obligation begins in 2013 and has been incorporated into an audit standard of the Institut der Wirtschaftsprüfer in Deutschland e. V. specified.

Distinctions

Since the professional title of financial advisor is not protected and the range of products and services in which advice is provided is relatively broad, the advisors are active in the market in different organizational forms and business models. You can distinguish these according to the following criteria, among others.

Compensation model

Often the financial advisor or his company is remunerated by the product provider after the placement is successful. Alternatively, in the case of fee- based advice, remuneration is paid by the person advised in the form of a fee. Mixed forms of both forms of remuneration are also possible. The remuneration by the product provider has been criticized in part because there is a risk that the entrepreneurial interest in the remuneration could outweigh the customer's interest.

Contractual ties to financial product providers

Essentially, one can distinguish the contractual relationship according to whether and with how many product providers there are contractual relationships and what obligations the financial advisor has from these contracts. It is possible for an entrepreneur to have different types of contractual obligations depending on the product group. He can act as a broker for insurance companies, but as a multiple agent for investments.

  • Simply tied agent (single company agent, exclusive representative)
As a commercial agent, the consultant is exclusively bound to a product provider. Under the contract, he is obliged to protect the interests of the product provider.
  • Multiply bound agent (multiple agent, multiply bound agent)
As a sales representative, the consultant is contractually linked to several product providers. Protecting the interests of the product providers is also part of his contractual obligations.
  • Brokerage Agreement
The broker is bound with the customer by a brokerage contract; he has to represent its interests. He has a contractual agreement with the product provider on remuneration in the event that a mediation comes about (reversal).
  • No contractual relationship with the product provider
In particular, if the financial advisor works for a fee, no contractual relationship with the product provider is necessary.

Job qualifications

Since the field of activity of the financial advisor can be very different in depth and breadth, there is no uniform professional qualification. In addition to private, in-house or university-related training and certifications, the following professional qualifications under public law are relevant. The product groups covered in the qualification are indicated:

Professional qualification Qualification level loan Capital investment Insurance
Bank clerk education yes (consumers and businesses) Yes No
Banking specialist Advanced training yes (consumers and businesses) Yes No
Specialist for financial advice Advanced training yes (consumers and businesses) Yes yes (consumers and businesses)
Expert advisor for financial services Advanced training yes (consumer) Yes yes (consumer)
Financial investment specialist Expertise examination No Yes No
Specialist in insurance and finance Advanced training No depending on the chosen focus yes (consumers and businesses)
Businessman insurance and finance education No depending on the chosen focus yes (consumers and businesses)
Insurance specialist Advanced training No No yes (consumers and businesses)
Insurance salesman education No No yes (consumers and businesses)
Insurance specialist Expertise examination No No yes (consumers and businesses)

Professional organizations

There is no uniform professional organization for financial advisors in Germany. Major interest groups include the AfW - Federal Association of Financial Services (AfW) and the Federal Association of German Insurance Merchants (BVK).

See also

Individual evidence

  1. ↑ § 5 Legal Services Act, § 4 Tax Advisory Act.
  2. ↑ § 34c Trade Regulations.
  3. ↑ § 34d Trade Regulations.
  4. ↑ www.vermittlerregister.info
  5. ↑ § 34c Trade Regulations.
  6. ↑ Law on the amendment of the financial investment brokerage and investment law
  7. ↑ More protection against incorrect advice in the gray capital market ( memento of the original from October 19, 2012 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. . Website of the Federal Ministry for Food, Agriculture and Consumer Protection. Retrieved September 11, 2012.  @1@ 2Template: Webachiv / IABot / www.bmelv.de
  8. ^ Ordinance on the brokerage of financial investments
  9. ↑ Audits of financial investment brokers according to § 34f GewO
  10. ↑ Baden-Württemberg consumer report for serious financial advice. Joint website of the Baden-Württemberg Ministry for Rural Areas and Consumer Protection and the Baden-Württemberg Consumer Center. V. Retrieved March 18, 2012.
  11. ↑ Section 86 of the Commercial Code.
  12. ↑ Example: Certified Financial Planner (CFP) ( Memento of the original dated December 11, 2011 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. Financial Planning Standard Board website. Retrieved March 18, 2012  @1@ 2Template: Webachiv / IABot / www.fpsb.de