BaFin supervision of independant intermediaries will not achieve its goal
A comment by CEO Thomas Richter
Making the Federal Financial Supervisory Authority (BaFin) responsible for supervising intermediaries within the meaning of section 34f will not achieve its goal of standardising supervision and improving advice. Instead, one discrepancy will be replaced by another. Until now, BaFin has been responsible for supervising investment advisors at banks, while the chambers of commerce or business licensing offices have supervised independent intermediaries. In future, the latter are to be supervised by BaFin, but insurance brokers will remain under the supervision of the chambers of commerce or business licensing offices. Since many intermediaries within the meaning of section 34f also work as insurance brokers, this would mean that they would be supervised by both BaFin and the chambers of commerce or business licensing offices. We expect this will prompt many brokers within the meaning of 34f who offer investment brokerage alongside many other services to limit themselves to insurance products in order to avoid costly double supervision. In the end, product variety and the quality of advice will suffer. Investors will ultimately pay the price.
Nevertheless, the proposal has made it into the coalition agreement. The intention is to protect consumers. Consumer advocates obviously do not realise that they are supporting a move which will promote a shift towards insurance products and thus a reduction in the range of products on offer. Although the federal states, the National Regulatory Control Council (NKR), academics and politicians have also criticised the deficits of the intermediary amendment, the federal government is sticking to its plan. Even the experts who were summoned specifically to support the project voiced criticism at the hearing of the German Bundestag. This should give the government pause. The fact that the plan is going ahead against the better judgement of various parties is food for thought. In light of this, the political announcements about reducing bureaucracy and strengthening the securities culture seem like lip-service.