Financial advisor help
Dubious financial advisor
What is a "Financial Advisor"?
The term "financial advisor", sometimes garnished with the addition "independent", is sonorous. It promises what many are lacking: sound advice on financial matters that is solely geared towards the well-being of the customer. Quite often, however, only hot air comes out, according to the motto: What is sold is what brings the highest commission. Anyone who thinks that a "financial advisor", "asset optimizer" or "money specialist" always has a bright head is making a big mistake.
The amendment to the trade regulations (GewO) and the regulation on the brokering of financial assets on January 1, 2013 did not introduce a precisely defined job profile. After all, since then the consultant has had to provide proof of expertise and take out insurance that is liable for financial losses (§ 34f GewO, § 1 FinVermV).
This does not apply to capital management companies under the KAGB and their advisors, as the business operations of a capital management company already require approval from BaFin.
How does a dubious financial advisor establish contact?
The first contact is often made without prior notice over the phone or at the front door. Unsolicited offers by email are also becoming increasingly popular. Contacting us without prior consent is prohibited by law. However, since disregard of the prohibition is rarely prosecuted, dubious financial advisors are not deterred.
Serious providers forego unsolicited phone calls. You only call them if there are already contractual relationships.
Checklist: How do you recognize dubious financial advisors?
- The initial telephone contact takes place without a request from the customer.
- Terms such as "optimize old-age provision", "save taxes" or "risk-free" are used as "decoy".
- Customer questions are often answered with counter-questions and moral pressure is applied ("Do I look like I'm lying?").
- The "friendship scam" is supposed to create trust, something like this: "Your work colleague / sports comrade recommended that I ask you whether you would also like to save a lot of money every month."
- High returns without risk are promised. But: the higher the return, the greater the risk!
- Only verbal promises are made about the security, return and duration of the offers. Attention: If these promises are not fulfilled, there are problems of proof. Therefore, always make promises in writing!
- Existing investments are badly made and you are asked to terminate them.
- The considerable costs of sales, preparation of prospectuses, administration and the brokerage of bank loans are concealed.
Danger: Never get rid of it, it's all in the prospectus.
- There is pressure to sign contracts quickly. But: investment products are a dime a dozen. There is no need to be in a hurry!
- A sales prospectus is only handed over after the contract has been signed - often after the withdrawal period has expired.
- The approval as a financial broker is not entered in a register at BaFin or at the locally responsible Chamber of Industry and Commerce.
How does the financial advisor make his money?
At the expense of the customer! Most "financial advisors" work as self-employed commercial agents on a commission basis. The more and the more expensive products are sold, the brighter the cash register rings.
It is not decisive whether the product fits the customer. It is not uncommon for the conversation to be directed towards a single offer anyway. The focus for the "consultant" is the quick conclusion of a contract. Because time is money.
Are there reputable financial advisors?
Yes, typical features are that
- they give the customer enough time to study the investment documents carefully and recommend that they do so
get a second opinion, e.g. from a consumer advice center or a tax advisor;
- they have no problem with confirming and delivering the important facts in writing;
- they expressly declare that the contract can be revoked within 14 days if doubts about the decision arise after the conclusion of the contract.
Important for her!
Never enter into contracts with financial advisors who
- want to get in touch and talk about monetary matters without prior agreement;
- come up with the "friendship scam" and push for a hasty conclusion;
- promise high returns without risk and an exit option at any time;
- only make verbal commitments.
The best protection against such financial sharks: Simply hang up the phone!
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