Fund industry as an important economic factor
Investment companies handle assets of some EUR 3 trillion for around 50 million private and institutional investors. This makes them an extremely important economic force in Germany. They are a key element of the country as a financial centre and actively shape and develop its regulations and standards. They account for 16,000 jobs directly and an additional 300,000 jobs indirectly, primarily in distribution, but also in legal practices, agencies and consultancies.
Heart of the pension system
Investment companies play a central role in pension provision in Germany. Many people save directly through fund products or make provisions for old age via insurance companies, pension funds, their employer, etc. In practice, this capital is often managed within retail funds or ''Spezialfonds'' (funds for institutional investors only). The concept of capital-funded retirement provision is inconceivable without fund companies.
Fund companies act as trustees and are legally obliged to act exclusively in the interests of their investors and in accordance with the integrity of the market. They are committed to rules of conduct, which include far-reaching obligations in terms of their actions and organisation. No other type of provider of investment products is subject to such fiduciary obligations, which are monitored by the German Federal Financial Supervisory Authority (BaFin) when managing investor capital.
Growth and innovation
Funds attract and channel capital. They bring together the two sides of the market, namely the capital provided by millions of savers on the one hand and the demand for capital from companies and the state on the other. This approach provides companies with equity and loan capital for growth and innovation. Without fund managers, many major international corporations would not have developed into what they are today. As purchasers of bonds, the investment industry makes a major contribution to financing the public purse.
The fund product is unique. Funds provide insolvency protection to investors. The assets which make up a fund portfolio are maintained separately. If the fund company became insolvent, these assets would therefore not form part of the insolvency estate.
What's more, the investment industry is one of the most regulated industries. All fund companies are required to act solely in the best interest of their investors. The German Federal Financial Supervisory Authority (BaFin) monitors strict compliance with these rules.