Financial advice, commissions and fees

A meeting advertised as free can lead to a product whose price includes sales commissions. Get the payment model, full costs and exit terms in writing before committing.

In short

• Provision is a sales commission; Honorar is a fee. Ask who pays, how much, and whether payment depends on signing or keeping a product.
• A separate advice fee does not guarantee suitable advice or remove the product’s own costs.
• Registration helps establish an intermediary’s identity and permitted activity. It does not certify a product’s suitability or investment return.

Before signing

At the first business contact, covered insurance intermediaries must explain their type of remuneration and whether you pay them directly or it is included in the premium as commission or another payment. Section 15 of the Insurance Intermediaries Ordinance sets this duty; section 16 sets the form and timing. If the first contact is by phone, the information must be provided immediately afterwards.

For financial investment intermediaries covered by the Financial Investment Intermediation Ordinance, section 12a requires information in text form about fees you pay them or permitted payments they receive from third parties before advice or intermediation and before the advice contract. Section 13 also requires information about investment costs and risks, including an itemised cost breakdown on request. Other types of provider may be subject to different rules.

1. Write down the problem you need solved, your available monthly budget, and when you might need the money or leave Germany. Ask how the proposal fits those facts.
2. Request the adviser’s full legal name, business address, status and registration number. Check insurance and relevant investment intermediaries in the DIHK intermediary register. Some investment providers or tied agents fall under BaFin’s system instead; ask which authority and register cover the actual service and verify independently.
3. Ask for the product information, contract and complete cost breakdown: initial commission or fee, ongoing advice, administration, fund charges and exit costs. Compare euros as well as percentages. Ask what remains payable if you cancel the product but have signed a separate fee agreement.
4. Ask about minimum duration, stopping or reducing contributions, early surrender value, exclusions and access to money. Obtain written answers about a move abroad; do not assume a tax advantage, insurance cover or contribution arrangement continues unchanged.
5. Take the papers away for an independent review, for example with a Verbraucherzentrale. Check its consultation price and scope first. Do not sign because an adviser speaks your language or promises an expat-only opportunity.

If you already signed

Keep the application, information sheets, advice record, messages and fee agreement. Get prompt advice about any withdrawal period and complaint route; deadlines depend on the contract. Ask for the cost of cancellation before replacing an existing contract with another commission-bearing product. Do not stop essential insurance without arranging suitable continuation.

Common mistakes

• Comparing only the monthly payment and overlooking fees or a long commitment.
• Treating projected returns or tax savings as guaranteed.
• Cancelling the product and assuming every separate advice fee disappears.