*by Johannes Fiala, Lawyer (Munich), M.B.A. (Univ.Wales), M.M. (Univ.), Certified Financial and Investment Advisor (A.F.A.), EC Expert (C.I.F.E.), Banker (www.fiala.de) and Ralf W. Barth, property damage insurance broker (www.rwb-finanz.de), Chairman of the Board of the Association for the Protection of Investment and Insurance Intermediaries (www.vsav.de)
EU Directive: For years, intermediaries in the financial sector have feared the loss of their professional accreditation or licence due to the advertising of their courses by some training institutions. In doing so, these providers refer to Directive 2002/92/EC on insurance mediation. However, due to the wording “appropriate knowledge and skills”, this directive does not contain any obligation to pass a professional examination. It is still open as to whether a specialist knowledge examination will also be compulsory for professionally experienced and/or commercially trained intermediaries. For future entrants to the profession after implementation of the EC Directive, it may be that the cherries will hang higher on the tree.
Limits for the legislator, by the Basic Law: In the Pharmacists’ Ruling (Federal Constitutional Court of 11 June 1958, BVerfGE 7, 377 ff.), Article 12 I GG is laid down as a uniform fundamental right of professional freedom. According to this, objective and subjective barriers to admission as well as regulations on the exercise of the profession (three levels) are conceivable. Subjective conditions are above all factors that can be influenced by the person concerned, such as prior education or training. Decisive factors may be, for example, whether the practice of the profession would be impossible or improper without the fulfilment of the stipulated prerequisites and whether this would cause damage or danger to the general public. Which professional association will take on the task of working out, within the framework of lobbying, what legal limit the constitution sets for the legislator, and what could really be the worst case scenario for the intermediary already in the profession? So that in the future more clarity prevails and no more business with ?the first general uncertainty? comes off. Discrimination against nationals: The legislator could certainly impose additional requirements (going beyond the minimum framework of the EC Directive) as part of the implementation of the Directive, for example an expert knowledge examination. Thus, many a manual worker was surprised that his training took a long time and a lot of money had to be raised for it, but one or the other European foreigner with lower requirements obtained a professional qualification that allowed him to work in Germany. Chief task for financial entrepreneurs: From an entrepreneurial point of view, qualification makes sense, especially in the field of business administration. By the § 34 d GewO additional costs of up to 5,000 euro per year will come on the free mediator (VSH, administration, chartered accountant, etc.), without a cent more business comes out. Tutor boss Pedersen describes this aptly: ?Who is not there commercially versed and further believes to come only with something sales-technically and cheerful Tariferaten over the rounds, will fail entrepreneurially. Who lifts however once the fingers, loses automatically its trade license and separates from this market in the long term. The old trick of running the business through the wife or grandma will also no longer work, because the companies will no longer be allowed to cooperate with such trick agencies in the future? Looking back at the KWG amendment: When the 6th KWG amendment was implemented on 01.01.1998, there was no real “grandfathering”, but only a simplified application procedure for a §-32 KWG BaFin license. The only relief at that time was the waiver of the own proof of professional competence by examinations. The decisive factor was that no market participant was to lose its profession, which was already protected by the Basic Law, as a result of the new regulation. The jurisdiction of the Constitutional Court forced the legislator to weigh up the interests ? Interventions had to remain proportionate. What applied to the KWG amendment at that time equally applies to the implementation of the EC Mediation Directive today.
Silent selection: For years, experts have seen market participants disappear from the market completely because requirements have changed. The average income of German brokers is said to be less than 50,000 euros ? the bursting of the stock market bubble contributed to this, as did increased risks in the market for closed investments, lower commissions, and the abolition of tax privileges in the area of small business insurance and real estate. In addition, there are increasingly higher requirements on the part of the insurance companies and the customers, which brokers who are not willing to qualify will not meet in some cases. Not to be forgotten is the ?silent tax increase? in the way of a broadening of the assessment basis of the legal health insurance: Still numerous mediators do not know that the disbursement of private life insurances are considered with the GKV contributions ? completely without saver allowance of course. What happens, if the mediator overlooked this in its sample calculation for the customer as well as its personal Businessplan for the increase in value of own vocational activity so far? Consulting minutes swindle: Successful mediators work already always with a consulting minutes, in order not to risk for lack of documentation in the adhesion process without emergency, house and yard. Some initiators send the mediators (consciously?) into the error, by a liability-free selling without minutes one advertises: This is of course sheer nonsense, as a look at the well-known bond ruling of the BGH should show every intermediary. Some advanced training institutes, associations and self-proclaimed gurus offer protocol samples against expensive contributions ? mostly it is written offers and no discussion protocols. Forms can offer a raster, thus as it were a check list ? never replace these the personal logging of a discussion process. Therefore, for a qualified way of working, a data and wish recording is always connected with the additional conversation details, which interested customers give to the intermediaries. The judge demands two things in the liability process from the mediator: 1. the description of the conversations, in order, individually and so to speak as an experience report. If the compensation is only statute-barred after 10 years, then the protocol must still give the exact course of the conversation after 10 years. A merely one-sided reproduction of the instructions given by the intermediary is merely an ineffectual attempt. 2. date and times, place information and discussion cause belong there also in. Conclusion: Consistent personal qualification, also with the selection of the products, product givers and the own property damage liability, help the mediator to recognize and prevent unqualified swindles faster. There is no such thing as a liability-free sales force, nor is there a miracle cure for bad advice through a standard advice protocol. Intermediaries need to recognise that the opportunity lies not only in rethinking, but more importantly in thinking ahead. Think of the hare and the hedgehog (www.has-und-igel.de): The prah-leric hare with the misjudgement of his strength(s), must ultimately succumb to the strategically sovereignly placed hedgehogs. Think and act with foresight like a hedgehog if you want to continue to place yourself confidently in the industry.
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About the author
Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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