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 Frank Rottenbacher
AfW Member of the Board
The future of financial advice in Europe: why a commission ban is not the answer
Europe is a place where borders have been overcome to unite people, cultures and ideas. European integration has paved the way for a common market that has facilitated the exchange of goods, services and capital, creating prosperity and opportunity for many millions of people. We can be proud of our common achievements, from the creation of the Euro as a monetary unit to the unification of standards and regulations in many areas. When I go on holiday with my family by car, this always becomes particularly clear to me. From Germany to Austria, Italy and France. You no longer have to stand at any border, show your ID or exchange money. What an achievement that my children - what luck - already take for granted!
Europe has formulated ambitious goals in many areas to protect the interests of consumers as well. The latest goal is to make the capital market more accessible to citizens. To this end, the Retail Investment Strategy was launched, which aims to encourage and enable consumers to invest more in the capital market. These goals are undoubtedly important, correct and deserve recognition.
However, we also need to be honest about the challenges that come with implementing such goals. Often, the best intentions are torpedoed by proposals that ultimately make it impossible to achieve the goals. An example of this is the proposed commission ban in the Retail Investment Strategy, which would ultimately exclude large parts of the population from qualified financial advice.
It is important to emphasise that commission-based remuneration does not automatically lead to conflicts of interest. Financial advisors provide high-quality advice and suitable solutions to their clients regardless of how they are remunerated. However, a ban on commissions would lead to a one-sided solution and limit the diversity of advisory models.
We should therefore take a balanced approach that focuses on both consumer protection and access to qualified financial advice. It is important that consumers can make informed choices and have a wide range of advice services available. This requires flexible and differentiated solutions that meet consumers' needs and preferences. As long as consumers are not willing to pay adequate hourly rates for qualified fee-based advice, a commission ban will lead to them doing even less for their old-age provision or investing less or not at all in the capital market. This cannot be in the interest of politics and certainly not in the interests of consumers.
Dialogue between policymakers, regulators and the financial services industry is crucial to find the best ways to achieve the goals set. Together we can work on practical regulation that strengthens consumer protection, enables innovation and at the same time ensures that all citizens have access to qualified financial advice.
Let's not lose sight of the positive goals, but also address the potential dangers of overly restrictive and patronising implementation. If the political will is there, if prejudices are broken down, we can find solutions together that strengthen consumer protection, preserve the diversity of advisory services and encourage European citizens to participate in the capital market.
At FECIF, we are very much ready for such a constructive dialogue.
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