Firms providing fee-based investment advice in Germany must begin complying with a new set of regulations this month regarding conflicts of interest, commissions, products offered, and other requirements.
Germany’s Fee-Based Investment Advice Act, which took effect 1 August, marks the first time the country has applied specific regulations to fee-based advice. The Federal Financial Supervisory Authority, known as BaFin, said in a press release that the new requirements include provisions that the advisor only be remunerated by the client, must have access to “a sufficient range” of financial instruments, must be able to recommend issues from other providers besides their own firm or group, separate themselves organizationally from conventional investment advisers, join a register of fee-based investment advisers, and refrain from engaging in fixed-price transactions except for own issues.
