The German Financial Advice Market 2007

Table of Contents

• EXECUTIVE SUMMARY
  • Market Structure
  • Regulatory Developments
  • Competitor Dynamics
  • Opportunities
• CHAPTER 1 INTRODUCTION
  • What is this report about?
  • Who is the target reader?
  • How to use this report
• CHAPTER 2 MARKET STRUCTURE
  • Introduction
  • Key findings
  • The financial advisory distribution channel in Germany is very large but truly independent advice is still marginal
    • Germany' s financial advisors have not been held in high regard in recent years
      • Large financial advisory firms and networks are accused of being product pushers
    • The German insurance sector is experiencing a move towards a more intermediated market
    • Demand for independent financial advice is expected to rise due to complexity of pension products
    • There are currently around 500,000 financial intermediaries in the German market
    • Germany is home to two-thirds of the total European financial intermediary community
    • The German financial advice market is dominated by single-tied advisors
    • In the German financial services market banks dominate the sale of mutual funds
      • Banks have a firm grip on the distribution of mutual funds in the German market
      • The insurance channel has gained in importance despite pressure from banks
      • IFAs and other advisors remain a significant channel for the distribution of mutual funds
      • Fund supermarkets and the direct channel are relatively insignificant in the German market
  • Data Tables
• CHAPTER 3 REGULATORY DEVELOPMENTS
  • Introduction
  • Key findings
  • The Central Bank and the Federal Financial Supervisory Authority regulate the German financial services industry
    • The Federal Financial Supervisory Authority BaFin represents the German FSA equivalent
    • Membership in the FPSB association is regarded as a stamp of quality for financial advisors
    • HNW advisors are organized in the Association of independent Wealth Managers
  • The European Commission has introduced a number of regulatory reforms affecting financial services in the EU
    • The Financial Services Action Plan (FSAP)
    • UCITS III
    • Insurance Mediation Directive (IMD)
      • IMD regulation is likely to change the German financial services distribution landscape
    • Markets in Financial Instruments Directive (MiFiD)
      • MiFiD regulation is likely to have a profound impact on the German financial advice channel
    • The European Commission suggests a regulatory ' pause' over the next five years
      • EC simplification project is likely to affect the insurance industry across Europe
• CHAPTER 4 COMPETITOR DYNAMICS
  • Introduction
  • Key findings
  • The German financial advice market is dominated by 4 firms
    • The top four competitors in the German market are DVAG, AWD, MLP and OVB, holding 75% of the financial advice market there
    • The total revenue of DVAG, AWD, MLP and OVB amounted to more than EUR2.1bn in 2005
    • DVAG is the largest German financial advisory firm, measured by revenue, followed by AWD and MLP
    • DVAG enters into exclusive partnership with AachenMüchener
    • AWD closed its Italian operations because of a lack of profitability
    • MLP focuses on its core business following the sale of its life arm
    • OVB went public but majority stake remains in life insurers' hands
    • Broker pools are gaining popularity in the German advice market
  • Data Tables
• CHAPTER 5 OPPORTUNITIES
  • Introduction
  • Key findings
  • The German financial advice market offers only restricted opportunities for new entrants but the market looks good for independent advice
    • Broker pools have gained increased popularity but the boom period is over
    • Germans do not embrace the idea of fee-based financial advisory service
      • Independent financial advisors have to find a niche to successfully compete in the German market
    • Retirement provision is the most prevalent issue in the German financial advice market
      • Independent financial advisors offer their clients mainly traditional investments
  • Data Tables
• APPENDIX
  • Definitions
  • Research methodology
  • Further reading
    • Global Wealth Management SPP
      • Interactive Databases
      • Market Reports
      • Strategic Insight Reports
      • Wealth Management Competitor Tracker
    • Datamonitor Asia Pacific Wealth Management SPP
    • Savings and Investments SPP
      • Interactive Databases
      • Reports
    • Life and Pensions SPP
      • Interactive Databases
      • Reports and Briefs
    • Financial Advice Market SPP
  • SPP writing team
  • List of Tables
    • Table 1: Number of German intermediaries, segmented by group, 2005
    • Table 2: Total number of intermediaries, segmented by country, 2005
    • Table 3: German intermediaries, split by channel, 2005
    • Table 4: Distribution of life insurance products in Germany, 2005
    • Table 5: Key figures of Germany' s top 4 financial advisory firms, 2005
    • Table 6: Shareholder structure of OVB AG, 2005-2006
    • Table 7: Top 20 financial advisory firms in Germany
    • Table 8: AWD revenue breakdown by geographical origin, 2005
    • Table 9: Top 10 broker pools (' Maklerpools' ) in Germany, 2005
    • Table 10: In your opinion, how relevant are the following topics in the market?
    • Table 11: Which products do you offer your clients actively and regularly?
  • List of Figures
    • Figure 1: There are currently around 500,000 financial intermediaries in the German market
    • Figure 2: Germany has by far the largest number of financial services intermediaries in Europe
    • Figure 3: Almost two-thirds of German financial advisors are single-tied
    • Figure 4: Distribution in Germany is slowly diversifying but is still controlled by the banking networks
    • Figure 5: The top 4 financial advisory firms in Germany were controlling 75% of the financial advice market in 2005
    • Figure 6: The revenue of the top 4 financial advisory firms in Germany increased significantly in 2004
    • Figure 7: DVAG relies on "first-class products of strong partners"
    • Figure 8: In 2005 AWD generated almost 50% of its revenue outside its home market
    • Figure 9: MLP has subsidiaries in a number of European countries and also operates its own bank
    • Figure 10: BCA is the largest broker pool in the German market with a commission revenue of EUR66.5m in 2005
    • Figure 11: Retirement provision is the most prevalent issue in Germany
    • Figure 12: Traditional investments are the most offered products in the German financial advice market