What is the best money advice

Financial advisor for investment issues

Consumers may need the help of a financial advisor to find the one that suits them best among a variety of investment options. The financial advisor helps, for example, with the selection of a suitable investment or supports consumers in putting together appropriate insurance cover. Likewise, financial advisors can help configure a home loan. At the end of the consultation, the advisor can also arrange financial products directly.

Self-employed or employed financial advisors

Financial advisors can be self-employed or employed. Financial advisors are often also insurance brokers or insurance intermediaries.

Find a good financial advisor

It is often difficult for consumers to find a good financial advisor in the open market. Good financial advisors are usually optimally trained and have sufficient professional experience. For example, you can find out about your financial advisor's training or professional experience in advance on his / her homepage. When you contact us for the first time, you can also ask about his or her professional experience or skills.

A possible proof of advisory competence could also be an IHK certificate such as "Fachwirt für Finanzplanung (IHK)".

A financial advisor is also good if he is independent and does not work purely as an intermediary for a bank or insurance company. As an independent financial advisor, for example, he is not bound by special commission agreements. So you can be sure that you are getting a loan on the best terms on the market.

There is no place for unconditional trust

Even if a financial advisor is looking for the best possible protection or investment for you, he will always act strongly in his own financial interests. So it is important not to trust him unconditionally, because in the end he wants to earn money from you.

Always remember that there is basically nothing for free in the financial industry.

This is how you go to financial advice well prepared

Independent of a financial advisor, you can find out in detail about individual forms of investment in advance. There is generally enough information on the banks' websites to get an idea of ​​what is on offer. You can also use comparison portals to compare individual products or providers - for example in a loan comparison. You should also think in advance which types of investment you are particularly interested in and how much money you would ultimately like to invest.

The goal of your investment is also important. With this goal in mind, the financial advisor can find suitable solutions much more easily. Should the capital be used primarily for old-age provision or do you want to invest in real estate?

The more you know in advance about your own goals and wishes as well as about possible products, the better you are prepared for financial advice.

This is how you can recognize dubious financial advisors

  • The financial advisor will call you before you even get in touch.
  • You should sign blank forms.
  • You will be urged to complete some products.
  • The advisor does not explain the risks of investment products to you.
  • The counselor does not accept any further witnesses during the consultation.
  • You will be taken by surprise with a sales prospectus right from the start.

This is how you can recognize a reputable financial advisor

  • You will receive written confirmation of the most important facts.
  • The advisor gives you sufficient time to think about it before signing the contract.
  • The advisor will explain your options for objection.
  • The advisor tells you that you can also get a second opinion, for example from the consumer advice center.
  • The advisor goes into the status quo of your investment in detail and tries to include it in the new concept without wanting to terminate prematurely.
  • Serious consultants work with a consultation protocol.

If you want to change your financial advisor, you should check existing advisory contracts. If contractual deadlines have been agreed, you must adhere to them. If there are no corresponding contracts, you can easily change your financial advisor without separate notice.

Fee vs. commission

Customers have the option of using different types of financial advisors. Some consultants work on a fee basis. This means that they will receive a fee for their advice regardless of the contracts concluded. The usual rate is up to 150 euros per hour. Investing in a fee advisor can, however, be worthwhile, as these financial advisors can recommend suitable products completely independently of commissions.

If a financial advisor only works on a commission basis, customers can quickly fall into the so-called “commission trap”. In this case, the consultant does not mediate the best possible product for the customer, but rather the one with which he gets the most commission.

Types of financial advisors

There are several types of financial advisors:

  1. The fee advisor
  2. The commission advisor
  3. The consumer advocate

These types differ in their approach. While the fee advisor offers his consulting service for a fixed fee, the commission advisor advises free of charge, but is rewarded through the commissions of the brokered financial products. The consumer advocate recommends financial products based on secured data on individual credit institutions.

Those who rely on the greatest possible security when investing should therefore opt for the advice service of the consumer protection centers. Anyone who does not want to pay anything for the advice and is prepared to receive a product selection based on the consultant's commission scale can use the commission consultant. The fee advisor is recommended for independent advice, in which the customer is advised as objectively as possible, even on risk-taking investments.

The fee advisor

The fee advisor receives a fixed fee for his consulting services. Similar to legal advice, billing is based on hourly rates. Fee advisors are free in their recommendations, as their payment is not based on commissions from the credit institutions. You can therefore recommend products objectively and independently in the interests of the customer. The payment of the fee is therefore not dependent on the number of contracts concluded. Theoretically, the fee advisor has no primary interest in concluding a contract, but rather in ensuring that the customer is optimally advised.

If you choose a fee advisor, you have to expect hourly rates of around 150 euros. The initial consultation with a fee-based financial advisor is usually free of charge, as it is only used to get to know each other.

The commission advisor

The commission advisor offers his service free of charge. His consulting service is only paid for after the conclusion of a product through commissions. Thus, the commission advisor cannot act as independently as the fee advisor, since the amount of his remuneration is directly linked to the type and number of deals.

The advice can often suffer from these conditions, as the commission-based financial advisor is inclined to recommend products that bring in more commission than products that are better suited to the customer.

If you still decide to use a commission advisor, you should be particularly well prepared for the consultation and carefully compare the proposed products with your own ideas, financial resources and goals. In this case, it can also be worthwhile to get a second opinion.

The consumer advocate

Consumer advocates differ from other financial advisors in that they are on the customer's side per se. You are therefore not interested in earning anything from the recommendations, but only in showing the consumer the best possible solutions. Because of their objectivity and their social role, consumer advocates are not allowed to sell any products.

To get financial advice from a consumer advocate, go to the nearest consumer center. There are various advice options there, but they are not free. Current prices for financial advice are around 150 euros for two hours.

If you are looking for financial advice that is based on a very high level of security and that is entirely in your interests, you should opt for the offer of consumer protection centers. This financial advice is also recommended if you want to obtain a second opinion on advice that has already been received.

Uniform consultation protocol

The uniform advice protocol was developed by consumer advice centers so that fixed standards can be used in the area of ​​financial advice. For consumers, this form of advice should be easier to compare, more transparent and easier to understand. The consultation protocol was introduced in 2010.

As part of the consultation protocol, consumers are informed in detail about the opportunities and risks of the financial products offered in each case. The individual steps of the consultation as well as all the information given are recorded in the protocol. Then the customer declares with his signature under the protocol that he has been fully informed. If things are listed in the protocol that were not explained in this way, the consumer can ask for improvements before signing.

Be careful with blank consultation minutes

Reputable financial advisors will never ask you to sign a blank advisory log!

Rules for the consultation protocol

Independent advice from financial advisors is to be ensured on the basis of fixed rules. So the advisor has the duty to ask the customer in detail about his financial situation. At the same time, he should determine what wishes the customer has with his investment.

Then there is an obligation to provide advice on the basis of an actual situation and the wishes of the customer. If certain financial products are recommended, the financial advisor must be able to justify the recommendation.

Financial advice according to DIN standards

The legislator is planning financial advice in accordance with the DIN standard. With the help of such a procedure, financial advice would receive a standardized framework. Consumers could rely on a firm approach of the respective advisor. With the help of the standard, the risk could be minimized that consumers could turn to dubious financial advisers or simply receive wrong advice.

Financial advice according to DIN, for example, should consist of a fixed process that first precisely records the current situation. Building on this, she would carry out a needs analysis on possible products.

A working committee made up of employees from banks, insurance companies and sales organizations meets for the possible introduction of DIN consulting.