You might not get what you need: The discrepancy between financial advice and commissions in Germany

Abstract

Retail banking customers seeking financial advice naturally aim to build portfolios that will support their lifetime planning goals. However, discrepancies may arise between the quality of financial advice and advisor commissions. We use savings and loan contracts (SLCs), a financial product earmarked by law for housing purposes, to empirically show that professional advice is no guarantee of a suitable match between investments and individual savings targets, even for the most financially experienced households.