Federal Finance Minister Christian Lindner said he was relieved about the EU Commission’s plans to allow banks and insurance companies to continue selling financial products on commission. “A ban on commission would have made it more difficult for customers with lower incomes in particular to take advantage of advice at low cost and at low thresholds,” said the FDP politician. For example, a private old-age provision in addition to the statutory pension is more important than ever. “It’s good that customers continue to have freedom of choice.”
In the case of sales on commission, insurance agents, for example, receive a percentage of money from the insurance companies and banks for brokering financial products. The more expensive the product, the more commission the representative usually gets.
criticism from consumer advocates
Most recently, a commission ban was up for debate in Brussels. EU Finance Commissioner Mairead McGuinness said in a speech on Thursday that other measures such as transparency obligations should be considered instead of a commission ban for more consumer protection. Even if there is no commission ban, that means “no free pass for the financial sector”. There had been great resistance from the financial sector to plans by the EU Commission to ban commissions.
Consumer advocates criticized the decision. “The EU Commission started as a tiger and ended up as a bedside rug. Even before the presentation of its plans, it gives in to the financial lobby,” said Britta Langenberg, consumer protection expert for the Finanzwende citizens’ movement. “For customers in the financial sector, this means that the main thing is to sell and not to give advice. Commissions and conflicts of interest remain part of everyday life.” This is bitter news for consumers.
The Commission intends to present details of its retail investor strategy at the end of May.