Banks and savings banks usually make a profit from the sale of financial products. Critics assume that the industry, therefore, often bypasses customer needs.
Germany’s savings banks are warning politicians against making fee-based advice on financial products the standard.
Mandatory fee advice is an insurmountable hurdle for many small investors, said the President of the German Savings Banks and Giro Association (DSGV), Helmut Schleweis, of the German Press Agency.
“If a small investor has to pay the actual costs of an average of 360 euros as a fee for an initial two-hour consultation, most of them no longer take any advice,” argued Schleweis. “Such a requirement excludes large sections of the population from access to good advice and is therefore lacking in solidarity.”
According to the savings banks, there are signals that a future federal government made up of the SPD, Greens and FDP could position itself in favor of fee-based advice. In the Greens program for the federal election, it was said, for example, that bank customers were often given “financial and insurance products that bypass their personal needs”. And further: “We want to move away from commission advice and gradually to independent fee advice.”
For banks and savings banks, commissions that they collect for the sale of products or in the real estate business, for example, are an important source of income – all the more so in the low interest rates that have persisted for years. While net interest income fell, the 376 savings banks in Germany at the time were able to increase their commission income in 2020. At 8.5 billion euros, this item accounted for around a third of the gross annual income of the public institutions.
Even today, due to legal requirements, commissions have to be disclosed in detail during and after the consultation, Schleweis explained. “With commission-based advice, small investors pay little, large investors pay more. We consider such a solidarity-based financing model to be better and more efficient than a system that divides our society along its wealth. ” A focus on fee-based advice would “widen the gap between wealthy and less wealthy investors,” warned the Sparkasse President.
Source From: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
