The EU Commissioner for Financial Markets, Mairead McGuinness, had already pulled the sharpest tooth out of the new set of rules in advance. Contrary to what was initially planned, she wanted to refrain from proposing a strict ban on commissions for financial advice in the EU, McGuinness said a month ago. She had listened to those who, in their opinion, a complete ban would be "too disruptive". What she meant by that was that in some EU countries, not least in Germany, the business model of consulting would have been jeopardized, especially in banks, where intermediaries of financial products receive a commission. The protest of the German associations and the federal government against the plans was correspondingly strong.

Werner Mussler

Economic correspondent in Brussels.

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The proposal for a new legislative package ("Investment Package"), which McGuinness presented on Wednesday together with the responsible Vice-President Valdis Dombrovskis in Brussels and which is primarily intended to better protect small investors, does not contain the ban on commissions. McGuinness stressed, however, that the package nevertheless meant the "entry" into a ban. The basic problem – that consultants who receive a commission for a product brokerage do not advise independently, but come into a conflict of interest as sellers – still exists.

The resulting "consulting gap" must be closed. "The fact remains: the status quo is unacceptable." An impact assessment commissioned by the Commission concluded that a total ban would be the best solution. Dombrovskis said that it is part of every piece of legislation that those affected are also heard. Overall, this hearing came to a different conclusion than the study. The Commission had weighed up the different arguments.

The entry into the ban on commissions

The "entry" into the ban on commissions consists of several elements. On the one hand, there will actually be no commission for non-advisory brokerages ("Execution Only"). Secondly, the Commission wants to ensure that customers are informed exactly how much commission a consultant receives for brokering a product. Currently, retail investors have to pay around 40 percent more than institutional investors, McGuinness said. "In my experience, many retail investors do not dare to ask their intermediary about the exact costs. That's why we need more transparency here."

Thirdly, consultants must examine the individual needs and interests of their clients more closely than before, thus enabling more "tailor-made" advice. To this end, the national supervisory authorities are to develop new test criteria. After all, the EU authority wants to take on the rules again after three years. Depending on the outcome of her examination, she could then propose a complete ban on commissions, said the Irish-born Commissioner. "Three years is not much. The industry must take action now to prevent the ban. We'll stay on the ball." The fact that she remains suspicious of financial advisors was documented by McGuinness with a number. According to a new Eurobarometer survey, 45% of EU citizens did not trust that the advice they received from financial intermediaries was to their advantage.