Fee-based financial investment advisor; application for a license

If you wish to become a self-employed fee-based financial investment advisor, you must apply for a license.

As a fee-based financial investment advisor, you independently broker financial products to clients 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 limited to certain financial products due to the so-called area exception 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

In addition to the license, you must also be entered in the register of intermediaries. You can submit the application for this together with the license application.

The content of your license can be restricted and linked to ancillary provisions if the authorities consider this to be necessary for the protection of the general public or clients.
The subsequent inclusion, amendment and addition of conditions is also permitted under the same conditions.

• The following documents are required:
  • Proof of personal reliability: certificate of good conduct and information from the central business register (both for submission to an authority).
  • Proof of orderly financial circumstances: Information from the insolvency court as to whether proceedings have been opened (so-called negative certificate).
  • Extract from the debtors' register of the central enforcement court
  • Proof of existing pecuniary loss liability insurance (certificate in sample wording)
  • Proof of expert knowledge (IHK proof of expert knowledge examination or proof of equivalent professional qualification, see also further information).
  • For legal entities and commercial partnerships: Extract from the commercial register of the country in which the company's head office is located.
  • If applicable, translation of the (foreign language) extract from the commercial register

• The reliability required for business operations, i.e. you have not been convicted of fraud or other crimes in the last five years
• Orderly financial circumstances, i.e. you are not in private insolvency or entered in the debtor register
• Professional liability insurance with a minimum cover of EUR 1,130,000.00 for each insured event and EUR 1,700,000.00 for all insured events in a year in total.
• You can provide evidence of the required expertise by passing an IHK examination or equivalent training qualifications and possibly corresponding professional experience

You send the application for a permit with all supporting documents to the competent authority in your federal state.

• The authority will use the information and documents you provide to check whether the legal requirements for granting a permit have been met
• If you meet the requirements, you will receive the permit in writing by post
• Before taking up your activity, you must submit an application for entry in the register of intermediaries

Once you have received the permit, you must register your business before starting your activity.