Insurance advice put to the test: BaFin uncovers serious deficiencies!

Insurance advice put to the test: BaFin uncovers serious deficiencies!

The Federal Financial Supervisory Authority (BaFin) has carried out a comprehensive review of the quality of advice given to insurers. As part of a secret mystery shopping campaign, a total of 72 consultations were held with six different insurance companies and their sales partners in 2024, with all contracts concluded being revoked. The aim was to test compliance with advice, information and documentation obligations that are required by law. The results were sobering. Mercury reports that testers accessed various sales channels, including exclusive distribution organizations, bank sales and salaried sales representatives.

In the conversations that took place between March and June 2024, the testers found that the advisors often did not ask sufficiently about the customers' individual wishes and financial situation. A clear deficiency in customer exploration was evident, which led to significant deficiencies in advice. BaFin found that whether the recommended products were suitable for customers was only documented in around half of the cases.

Serious deficiencies in advice

The analysis of the test results shows serious deficiencies in the advice. The main problems include:

• Kosten: Die hohe Kostenstruktur wurde oft nicht erwähnt, von 0,71 bis 3,29 % p.a., wobei die Renditeerwartungen häufig unter 2 % p.a. lagen.
• Kundenbedürfnisse: Die Berater haben nicht ausreichend nach den Wünschen, finanziellen Situationen und Risikobereitschaften der Kunden gefragt.
• Geeignete Produkte: Lediglich 19 der 72 Verträge erfüllten die EIOPA-Vorgaben.
• Beratungsprotokolle: Oft waren diese fehlerhaft oder fehlten ganz, was zu widersprüchlichen Angaben führte.
• Unterlagen: Die bereitgestellten Materialien waren häufig unübersichtlich, und in 32 % der Fälle fehlten Pflichtinformationen.
• Nachhaltigkeitskriterien: Oft wurde nicht über Nachhaltigkeitsaspekte bei Anlageprodukten aufgeklärt.

Recommendations for consumers

As part of the publication, BaFin clearly recommended that consumers should think critically about their goals and possible products before receiving advice. Clarifying questions if anything is unclear are just as important as requesting complete documents. Decisions should never be made under pressure.

Distinguishing between different types of consultants is also crucial. Insurance representatives usually only offer products from one company, while insurance brokers have a broader overview of the offers. Fee-based consultants, on the other hand, offer neutral advice for a fee and do not receive any commissions. BaFin points out that private pension provision should be viewed critically, as many new pension and life insurance policies are often unfavorable. Recommended alternatives include the Riester or Rürup pension, company pension schemes or self-made pension schemes with stock ETFs.

Finally, BaFin will contact the companies concerned where anomalies have been identified in order to identify and correct systematic deficiencies. However, the test results only represent a snapshot and cannot be transferred to the entire German financial sector BaFin emphasized.