In Brussels, the federal government vehemently represents the FDP position with regard to the EU ban on commissions.
(Photo: IMAGO/Shotshop)
Brussels The German financial sector has been looking to Brussels with concern for months: EU Finance Commissioner Mairead McGuinness plans to present her retail investor strategy in May. Among other things, she is considering a commission ban for financial advisors, which alone could cost German providers up to 14 billion euros in annual revenue.
Despite the forthcoming EU decision, the traffic light coalition in Berlin does not appear to have agreed on a common position. At least that is what the federal government’s response to a small request from the CDU/CSU parliamentary group in the Bundestag suggests.
“The federal government has not yet formed an opinion on this question,” wrote Finance Secretary Florian Toncar (FDP) in an email dated March 3. The government will “decide on this in the light of the expected proposals from the European Commission”.
The opposition had asked the government 34 questions about the commission ban. Most went unanswered. “The answer of the federal government shows one thing above all: that it is extremely badly prepared for the negotiations in Brussels,” criticizes Antje Tillmann, the spokeswoman for financial policy for the Union faction. “This means that around 300,000 investment advisors in Germany are suffering from another controversial issue of the traffic light.”
In fact, the Greens and the FDP also have opposing positions on this issue. The Greens share the consumer centers’ criticism of the commission model. They point to false incentives for consultants who are rewarded for selling the most expensive products possible and call for independent financial advice.
They cite Great Britain and the Netherlands as positive examples: After the commission ban ten years ago, the costs for financial products there have fallen significantly.
The FDP, on the other hand, defends the status quo with the argument that otherwise hundreds of thousands of investment advisors would lose their jobs, bank branches would have to close and a consulting desert would arise.
In Brussels, the government represents the FDP position
In the coalition agreement, the traffic light had excluded the controversial issue, the partners could not agree on a common position. In Brussels, however, the federal government has left no doubt about where it stands for months: it vehemently represents the FDP position. The Greens seem to be giving Christian Lindner’s Ministry of Finance a free hand on the subject.
Under German pressure, Commissioner McGuinness postponed her decision on the commission ban from late March to May. This gives the federal government another opportunity to organize the resistance in the EU Council. A workshop was held in Brussels last week to survey the mood of the member states. According to participants, a majority spoke out against a commission ban, including the large countries Germany, France and Italy.
However, several of those present were open to the arguments of consumer advocates. The block of supporters is led by the Netherlands, who refer to their own ban on commissions. Other possible supporters include Ireland and the Nordic countries.
The commission is also divided: While the liberal commission deputies Valdis Dombrovskis and Margrethe Vestager tend to ban commissions, Commission President Ursula von der Leyen (CDU) is counted among the skeptics. This could not least be related to the fact that she does not want to make any further opponents in Germany in the fight for a second term.
>>Read here: This means a commission ban for banks and investors
In its reply to the CDU/CSU, the federal government stated that the observations for the Dutch market “could not be applied directly to the German market”. This follows not least from structural differences in the old-age provision system. The increase in advice-free business after the commission ban in the Netherlands can also be viewed critically because it requires a special degree of financial competence.
The federal government is promoting maintaining the coexistence of commission-based advice and fee-based advice. From the point of view of critics, however, this means that fee-based advice does not prevail because commission-based advice always seems cheaper at first glance. Because the hidden costs that arise over the contract period are usually not clear to investors.
More: Finance Minister Lindner warns EU against commission ban