Fee advice

from Wikipedia, the free encyclopedia

With Honorarberatung one is consulting in financial and property issues referred to in which the consultant no commissions received by the product provider, but instead a fee from consulting receiver.

Content of a fee consultation

Fee-based advice is a form of remuneration for derivative financial services (advice and brokering of financial products). In the narrower sense, a recommendation regarding financial decisions is derived from a fee-based consultation, explained to the person being advised, and this activity is only remunerated by the person receiving the advice. The subject of such advice can be questions about investments , insurance , loans and other financial products, right through to holistic private financial planning .

Fee-based advice in the broader sense includes, in addition to advice, the mediation of original financial services (financial products). For example, the brokering of financial products, support with the processing of insurance claims or active asset management . Such services no longer represent fee-based advice in the narrower sense, because the focus is no longer on deriving a recommendation, but rather on providing a management service. If these services are provided by a fee advisor, the term fee advice is still used.

In practice, the term fee-based advice experiences process-related (e.g. commission payment) and target-oriented (e.g. sustainable support / exclusively in the interests of the customer).

features

Fee-based advice is characterized by the following features:

  1. The principle of independence of the advisor (in accordance with the principles of proper financial advice) is fulfilled in such a way that the provision of services is not impaired by personal interests or the interests of third parties.
  2. The services of the consultant or the consulting company are remunerated exclusively through a - previously agreed - fee that the customer pays to the consultant or the consulting company.
  3. Third party services, e.g. B. Commissions, are not part of the remuneration of the consultant or the consulting company for the services for its customers.
  4. Such third-party services are - if they come into the sphere of influence of the consultant or consulting company - reported to the customer in terms of type and amount and appropriately reimbursed.
  5. The type and amount of the fee complies with the principle of neutrality of the level of remuneration from the consulting result.

According to his own statements, the term fee-based advice was first defined in this form by Jörg Richter in the book Principles of Proper Financial Advice.

Forms of fee calculation

There are various types of fees on the market, sometimes in combination with one another:

  • Time fee : An hourly rate is agreed.
  • Flat fee : A flat fee is agreed in advance . This type of fee can be found e.g. B. in deliberations on clearly defined topics, e.g. B. "Tariff optimization of motor vehicle insurance". Some fee advisors keep a catalog of flat-rate services, similar to a fee schedule, or charge a recurring support fee .
  • Sales fee: The fee is based on the premium amount of the brokered contract.
  • Share of existing assets : The fee is calculated as a percentage of the assets, e.g. B. 1%. Often only the liquid assets in funds and asset management are included, but not real estate assets or life insurance.
  • Quantity fee: The fee increases for each existing financial product to be included in the consultation, e.g. B. "50 € per life insurance".
  • Income fee: The fee to be paid is calculated as a percentage of the household's current income.
  • Success fee : If certain goals are achieved, e.g. B. return or risk indicators, the fee is due.

Advantages of fee advice

Financial services such as investments, loans and insurance are complex products, the effectiveness and meaning of which can only be understood to a limited extent by consumers. Therefore, in the majority of cases, consumers seek financial advice .

If this advice is provided by the producer of the financial product himself (e.g. bank employee or insurance agent ) or by an intermediary (e.g. insurance broker , investment advisor , financial sales), the advice is part of the sales process and the customer is not billed separately . The consultant is paid through contract and portfolio commissions , which are financed from the costs contained in the financial product and which are often not or only partially known to the person being advised.

The consultant can get into a decision-making conflict: On the one hand, the customer expects professional advice and a recommendation that makes sense for him. On the other hand, the consultant has his own interest in earning income or possibly turnover targets from his employer. This can lead to unsuitable but highly commissioned products being recommended in preference, products with greater customer benefit but low commissions being concealed.

In the case of fee advice, this conflict should be resolved by foregoing commissions. The payment of a fee should lead to a consultation free of the consultant's own interests, i.e. only take into account the interests of the person being advised. Since the amount of the fee is i. d. As a rule, the full amount is known, there is cost transparency for the consumer in fee advice.

According to Stefan Albers, President of the Federal Association of Insurance Consultants, the costs of fee-based advice are based on the Lawyers' Remuneration Act. The hourly rates are so often 150 euros gross per hour.

In their investment advice, fee-based advisors can therefore also take commission-free products into account, e.g. B. ETFs . Fee advisors can advise clients against new investments without a conflict of interest and recommend the repayment of debts instead.

Disadvantages of fee advice

Due date of the fee even if the recommendation is not accepted

A fee advisor's entitlement to the fee arises from a written or oral contract with the person being advised. If the fee advisor has given and explained his recommendation, the fee is generally due. In contrast to commission advice, the due date of the fee is independent of whether the person being advised follows the recommendation and implements it. The fee must also be paid if the counselor refuses the advice. In the case of commission advice, the commission i. d. Usually only due if it comes to an implementation, i.e. the purchase of a financial product. Otherwise the consultation is free of charge.

In many countries, e.g. B. Germany, a commission must be reimbursed in full or in part even if the contract is canceled by the customer after conclusion. This u. U. multi-year liability for the consistency of the implementation is not given in the fee advice and leads to a clear disadvantage of the customer z. B. in brokering insurance contracts.

Immediate payment of the fee in full

When brokering financial products with a premium payment in installments (e.g. disability insurance ), the customer is not immediately charged the full amount of the commission, but is paid out from the premium payment in pieces over a period of up to several years. In the case of fee-based advice, the fee is generally due in full; payment in installments is not customary.

Conflicts of interest due to fee payment

Conflicts of interest between advisor and person being advised can also arise in fee-based advice. The calculation of a fee as a percentage of the managed assets leads to conflicts of interest if it would objectively make more sense to repay loans or to pay into a pension insurance instead of building up liquid assets. The consultant can also be in conflict between compliance with the client's risk specifications and the achievement of the target return, but the level of his fee depends on the latter. A fee advisor may generally be inclined to propose a solution that requires numerous readjustments and follow-up consultations in the long term, instead of an alternative that is less expensive to advise.

Decline in the supply and demand for advice

In countries in which fee-based advice was the only form of advice enforced by law by prohibiting commission advice, a large decline in the number of advisors was observed. The remaining consultants earn fees that households with low to average incomes cannot or do not want to pay. Financial advice is now only available to a limited extent for this group of people; financial products are bought over the Internet without advice. A clear decline in the supply of broad sections of the population with insurance and pension products is observed, which critics interpret as a signal for future poverty problems and as a failure of fee-based advice as an instrument of consumer protection.

Situation in Germany

In Germany, fee-based advice is regulated for two groups of financial products, without the exact designation of fee-based adviser previously being defined or protected by law.

Anyone who provides fee-based advice in the narrower sense of the word on insurance products requires a business license as an insurance advisor . Since an insurance advisor is not legally allowed to act as an intermediary, fee advice on insurance issues is mainly offered by insurance brokers. The fee is then generally only owed by the customer if a placement has taken place successfully; it is a success-related fee.

Fee-based advice on investments is regulated by the Fee-Based Investment Advice Act from August 1, 2014 and requires a permit. As with investment advice against commission, two alternative ways of approval and monitoring are possible. A consultant who limits his advice to investment funds and closed-end investment funds is referred to as a fee-based financial investment consultant ( Section 34h of the Trade Regulations ) and is approved and monitored by the local trade office. A fee advisor who wants to consider all financial instruments in his advice, e.g. B. also shares or certificates , must be approved and monitored by the Federal Financial Supervisory Authority (BaFin) as a fee-based investment advisor. Both types of consultants are subject to the same qualification and reliability requirements as investment consultants with commission income and are also listed in the public registration and complaint registers of the Chamber of Industry and Commerce (IHK) and BaFin.

It remains unclear whether consultants who do not register as Honorary Investment Advisor or fee financial investment advisers after 1 August 2014 to continue the designation fee consultants may carry. At the beginning (as of August 29, 2014) only nine fee consultants across Germany registered in this register.

There are no special legal regulations in Germany for fee advice on loans and other financial products. At the beginning of 2016, six guidelines were presented at the congress of the FAZ Institute for Fee Consulting. a. should regulate the professional requirements, remuneration and the content of the advice.

Situation in Switzerland

In Switzerland, transparent fee-based advice without hidden commissions is hardly widespread. There are numerous institutions, including larger ones, that charge a fee for their advice - but commissions are so firmly anchored in the Swiss financial sector that even most fee advisors cannot break away from the old braid of hidden commission. Many fee consultants accept kickbacks, in some cases exactly the same as consultants who do not charge a separate fee. Fee-based advice, for which no commission is paid, is still a niche market in Switzerland today and there is not a large consulting firm that works without reimbursements without exception. In Switzerland, the case law with regard to transparency and commissions is different than in most European countries. MiFID is not implemented in Switzerland. The transparency regulations are significantly less strict than with MiFID. In addition, there is no association of fee advisors. So customers have to put every consultant through their paces themselves. However, most investors lack the specialist knowledge and because topics such as financial commissions are dealt with much less in the media than, for example, in Germany, investors are less aware of the resulting conflicts of interest. However, many specialists assume that fee-based advice will also become more and more widespread in Switzerland in the future, especially among newly founded consulting companies.

Situation in Austria

In Austria, the level of awareness of fee-based advice is somewhat lower than in Germany. This applies to both the insurance and banking sectors. A recent study by AXA Investment Managers showed, however, that 56% of those surveyed are willing to pay fees for in-depth financial advice. However, 75% of those surveyed gave 100 euros as the upper limit for fee-based advice. Interest groups of the fee consultants are, for example, the Association of Austrian Fee Consultants or the Association of German Fee Consultants (VDH), which is currently working on entering the Austrian market. The first bank to offer fee-based advice is Capital Bank , which added this service to its range in 2005.

literature

  • Dieter Rauch: Fee instead of commission. Why trust in fee-based advice pays off. FinanzBook Verlag, Munich 2010, ISBN 978-3-89879-606-4 .
  • Jörg Richter: Principles of proper financial advice. Uhlenbruch-Verlag, Bad Soden / Taunus 2001, ISBN 3-933207-26-6 .
  • Johannes MC Tekathen: Fee consulting in the financial services sector: conceptual basis and empirical investigation of fee consulting from the perspective of private customers. Uhlenbruch-Verlag, Bad Soden / Taunus 2015, ISBN 978-3-933207-85-2 .

Web links

Individual evidence

  1. ↑ Tekathen: fee-based advice in the financial services area: conceptual foundations and empirical investigation of fee-based advice from the perspective of private clients , Uhlenbruch-Verlag, Bad Soden / Taunus, 2015 S. 56th
  2. ↑ Beenken / Radtke: Business consequences of a system change in the remuneration of insurance brokers. Study for the Federal Association of German Insurance Merchants (BVK) , 2013, p. 46f.
  3. ↑ Tekathen: fee-based advice in the financial services area: conceptual foundations and empirical investigation of fee-based advice from the perspective of private clients , Uhlenbruch-Verlag, Bad Soden / Taunus, 2015 S. 84th
  4. ↑ Compare: Jörg Richter: Principles of proper financial advice. P. 161.
  5. ↑ Jörg Richter: Fee-based advice - what is it? ( Memento of the original from July 26, 2010 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. Honorarberatung.de, February 4, 2010. @1@ 2Template: Webachiv / IABot / www.honorarberatung.de
  6. ↑ see Beenken / Radtke, p. 47f.
  7. ↑ Hillenbrand: Fee models are present , experts report 10/2013, p. 52f.
  8. ↑ Study on fee-based advice from German financial institutions, Simon-Kuchner & Partners; quoted from: Georg Wübker: Success factors of fee consulting. In: Die Bank, edition 12/2008.
  9. ↑ Deutsche Bank Research: Fee vs. Commission: Remuneration alone does not determine quality , February 2012
  10. ↑ Cornelia Teich: Independent advice for a fee . finanzen.de, May 7, 2014, accessed on March 12, 2016.
  11. ↑ see Beenken / Radtke, pp. 48/49
  12. ↑ Journal of Financial Planning, Vol. 27, No. 7, pp. 12ff.
  13. ↑ Franke / spark / Gebken / Johanning: commission and fee-based advice. An assessment of investment advice against the background of investor protection and wealth accumulation in Germany , 2011, p. 4ff.
  14. ↑ Bizarre name dispute over fee advice , accessed on June 22, 2014.
  15. ↑ https://portal.mvp.bafin.de/database/HABInfo/ BaFin-Register, accessed on August 29, 2014
  16. ↑ Matthias Hundt: Fee-based consultants want to end trench warfare . procontra-online.de, March 4, 2016, accessed on March 12, 2016.
  17. ↑ Study: Fee-based advice in Switzerland (PDF; 513 kB), VermögensPartner AG
  18. ↑ Customers open to fee advice. Retrieved June 8, 2010 .
  19. ^ Association of Austrian Fee Advisors. Retrieved July 29, 2010 .
  20. ↑ The VDH enters the Austrian market. Retrieved July 29, 2010 .
  21. ↑ Fee-based advice in Austria. Retrieved June 29, 2010 .