Neither in the case of the statutory pension nor in the case of old-age provision via capital cover can the future development be predicted with certainty in an advisory discussion. But the risks are fundamentally different and not at all correlated. Thus, the development of statutory pensions depends on the ratio of pensioners to
The pension system depends on the number of people in employment and on the development of wages, but not on investment income – in the case of capital cover, on the other hand, it is the other way round. After all, neither the statutory intergenerational contract of the Deutsche Rentenversicherung Bund (DRV) nor a funded pension scheme (e.g. via a pension chamber) provides any real “guarantee” of a development in value or income – this is ensured by future unforeseeable influences, for example on the part of politics or the capital markets.
What politicians don’t dare to say, intermediaries and advisors have to bring home to their clients: You have to increase your personal after-tax savings rate to more than one-third of your net worth. The bill would only be more favourable if the compound interest effect after costs were to clearly beat the loss of purchasing power, but this is increasingly turning out to be a pipe dream. Advisors and intermediaries of capital investments including life insurances will have to pay special attention to the implementation of investor- and object-oriented advice according to the BGH-Bond ruling (Ref. XI ZR 12/93). For example, investing an entire inheritance in a single product may maximize commission, but it also leads to avoidable cluster risk. It is particularly risky for advisors and intermediaries to rely on yield information, for example in prospectus material and in sample or forecast calculations. It will be crucial that the documentation of advice or mediation is complete and, if possible, without text modules, because gaps can easily lead to a reversal of the burden of proof in court and to the impression of incorrect advice.
by Dr. Johannes Fiala
by courtesy of
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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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