Tight control of the financial advisor

From 2021, the financial supervisory authority Bafin should take control of independent financial brokers. Several federal ministries have negotiated the plan for this. Above all, investors should benefit from this.

The Bafin - Federal Financial Supervisory Authority in Frankfurt.

Dhe Federal Ministries of Finance and Justice want to bundle and strengthen the previously fragmented supervision of the independent financial investment brokers. So far, depending on the federal state, the trade offices or chambers of industry and commerce have been responsible for this. “We will gradually transfer supervision of independent financial investment brokers to Bafin. The aim is to achieve uniform, high-quality financial supervision in the area of ​​financial investment brokering, ”said State Secretary for Finance Jörg Kukies.

According to a key issues paper coordinated with the ministries for justice and economy and which is available to the FAZ, the financial supervisory authority Bafin should take over responsibility from the year after next. As before, the prerequisites for permission to work as a financial investment broker should be reliability, orderly financial circumstances, proof of professional liability insurance and proven expertise. The Bafin will review the evidence.

We are talking about a “successive and risk-oriented” approach that is to begin at the beginning of 2021 at the large sales companies. Two to a maximum of five years have been planned for the review.

According to Justice Secretary Gerd Billen, consumers will benefit from the transfer of supervision over financial investment intermediaries to financial supervision. “Bafin has the necessary experience and expertise to guarantee a high and uniform quality of supervision nationwide.” This is the basis for a serious financial investment brokerage and for the trust of investors. The plan is to finalize the legislation in mid-2020.

Financial investment brokers are to be understood as the independent financial advisors who work, for example, for large financial sales organizations such as DVAG or MLP. They are often also in broker pools such as Fonds Finanz, BCA or Jung, DMS & Cie. united to provide technical and organizational support. The investment advisors arrange fund investments, building society contracts and insurance.

Financial lobby fears double supervision

The problem is that there is some overlap between the nearly 80,000 insurance intermediaries and nearly 38,000 financial investment intermediaries. The insurance brokers are to continue to be supervised by the trade authorities, so that representatives of financial distributors fear double supervision in the future.

According to the federal government, around 80 percent of financial investment brokers are also registered as insurance brokers with the chambers of industry and commerce. This means that a good 30,000 brokers fell under the simultaneous supervision of Bafin and trade offices.

The financial investment brokers usually live on the commissions they receive from the providers for brokering a product. The supervision of the Bafin is likely to be associated with higher costs for them. Because the costs for additional staff and technology for the Bafin, which is financed through levies, must be borne by the supervised.