Apply for a license as a financial investment broker

Would you like to provide investment advice on financial investments on a commercial basis without receiving a benefit from a product provider or being dependent on them in any other way (fee-based financial investment advisor)? To do so, you need a license under trade law.

As a fee-based financial investment advisor, you provide independent advice on financial products in return for a fee from the client. However, you may not receive any commission or benefits from the provider of the financial products. In this case, you must apply for a license as a financial investment broker. However, you may not work as a financial investment broker and fee-based financial investment advisor at the same time.

As a fee-based financial investment advisor, you are restricted to certain financial products by the so-called sector exemption of the German Banking Act.

The license covers (optionally) three product categories:

• Units or shares in domestic open-ended investment funds, open-ended EU investment funds or foreign open-ended investment funds that may be marketed in accordance with the German Investment Code.
• Units or shares in domestic closed-end investment funds, closed-end EU investment funds or foreign closed-end investment funds that may be distributed in accordance with the German Investment Code.
• Investments within the meaning of Section 1 (2) of the German Investment Act

Their authorization may be restricted in terms of content or subject to conditions if the authorities consider this necessary to protect the general public or investors. Subsequent inclusion, amendment and addition of conditions are also permitted under the same conditions.

• Required Documents
  • Identity card or comparable identification document (copy)
  • Non-EU citizens: residence permit (copy)
  • Proof of the legal form of the company
  • Registered office in Germany: in the case of registered companies, a current extract from the register, otherwise the articles of association or statutes
  • Registered office abroad: documents from this country proving the legal form.
  • Personal reliability
  • Residence in Germany: Certificate of good conduct for submission to an authority, information from the central trade register for submission to authorities
  • Residence abroad: Documents from your home country proving your personal reliability to perform the desired service.
  • Orderly financial circumstances
  • Extract from the debtor register of the central enforcement court
  • Information from the insolvency court as to whether proceedings have been opened (so-called negative certificate)
  • Proof of existing professional liability insurance (certificate in sample wording)
  • Proof of expertise (IHK certificate of expertise or proof of equivalent professional qualification)
  • Translation of the (foreign-language) extract from the commercial register, if applicable

  Please note:

  • • In the case of (commercial) partnerships, each managing partner must submit an application and the required documents.

In order to be granted a license as a professional fee-based financial investment advisor, you must

• be personally reliable,
• have orderly financial circumstances and
• have professional indemnity insurance and
• have successfully passed an expert examination at a Chamber of Industry and Commerce or an equivalent professional qualification.

If the license is applied for by submitting the § 34f license certificate (for financial investment brokers), no examination of reliability, financial circumstances and expertise is carried out. The § 34f license expires when the § 34h license for fee-based financial investment advisors is issued.

You must apply to the competent authority for permission to act as a fee-based financial investment advisor. Individuals (natural persons) apply for the license themselves or through an authorized third party. In the case of legal entities, the application is submitted by their legal representatives or by third parties authorized in writing.

Once you have submitted the application and all documents are complete, the competent authority will check whether you meet all requirements.

If you meet all the requirements, you will be granted a license as a professional fee-based financial investment advisor in the form of a license notice.

You may only start your activity once you have received the license. At the same time as commencing the activity, you must notify the trade to the authority responsible for trade notifications in accordance with Section 14 GewO. In addition, you must apply for entry in the register in accordance with Section 11a (1) of the Trade, Commerce and Industry Regulation Act immediately after commencing work as a fee-based financial investment advisor.

The permit must be issued before the start of the activity; it is therefore necessary to submit the application in good time (several weeks before the intended start of operations).

At the same time, you must notify the office responsible for business registrations of the start of your activity.

Is based on the respective administrative fee schedule of the federal state or on the fee statutes of the authorities responsible under federal state law.

In addition to the license, you must also be entered in the register of intermediaries. Persons directly involved in providing advice must also be entered in the register of intermediaries.

You may only employ persons directly involved in providing advice if you ensure that these persons have a certificate of competence and have checked that they are reliable.

Violations of the "required" licensing obligation and violations of enforceable conditions constitute administrative offenses that are punishable by a fine.