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In Germany, actively managed funds often pay periodic provisions to bank consultants.

This is still legal, but since a few years brokers have to disclose these payments for all funds you have shares of in your account.

However, is there also a way to get this information upfront?

I mean, learning about this after the fact is better than nothing - but arguably a person needs this transparency before he orders shares of fund in order to be able to make an informed buy decision.

Perhaps there is some kind of online database available?

Regarding terminology: You can also call such periodic provisions kickbacks. In German, banks and fund managers often call them 'Zuwendungen', 'Vermittlungsentgelte', 'Vermittlungsfolgeprovisionen', 'Bestandsprovision', 'Rückvergütung' or similar.

I'm just interested in periodic provisions. There are also one-time provisions possible, i.e. when shares of a fund are directly bought from the investment company (that actively manages the fund) and that company charges a one time fee for this ('Ausgabeaufschlag') which it might redistribute as a provision to a sales agent or bank consultant.

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  • 1
    can you provide some examples?
    – 0xFEE1DEAD
    Commented May 31 at 2:57
  • 1
    I think in North America we call these "back end load", "deferred sales charge", "trailing commission".
    – Chris W. Rea
    Commented May 31 at 16:48
  • @0xFEE1DEAD I've researched this a bit more and posted an answer. I also included a few concrete examples.
    – maxschlepzig
    Commented May 31 at 23:48

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In the last years higher German courts accepted argumentation related to undisclosed kickback payments having misled investors, such that compensation claims can be (partially) based on that.

Bank consultants and Brokers are thus incentivized to somehow disclose or make it possible to discover any kickback payments when working with a customer shopping for investment funds, prior buy order submission.

Sources:

Relevant legislative developments are summarized in an article by the German BaFin (Federal Financial Supervisory Authority): Zuwendungen - Verbot mit Ausnahme: Verschärfte Spielregeln für Provisionen und andere Vorteile (2018, English version: Inducements - Ban with an exception: tighter rules for commissions and other benefits). Basically, relevant laws and European directives nowadays are the Wertpapierhandelsgesetz (WpHG) and MiFID II, as of 2024. The arguably stricter regulation regarding provisions in MiFID II is effective since 2018 or so.

Hence, one way to learn whether a certain fund routes kickback payments to your broker, prior to buying any shares, is to prepare an order for - say - one share using the order mask of your favorite German online broker. Instead of submitting the order you can look for a button that generates an ex-ante cost report, i.e. a listing of all the costs you would experience in case you really submit that order. Such a button might be labeled 'Kosteninformation' (German).

As an example, I looked up a few open-end real-estate investment funds, using this online broker order-mask method (table as of 2024-05-31):

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
ISIN          Name                      Total-Costs    Kickback  Fund-Volume  Birth
―――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――
DE0007483612  Deka-­­Immob­­ilien­­Globa­­l          3.79 %      0    %      6.9e9 €   2002
DE0009809566  Deka-Immobilien Europa         2.96 %      0    %     18.4e9 €   1997
DE0009807008  (DWS) Grundbesitz Europa       4.92 %      0.41 %      8.5e9 €   1970
DE0009807016  (Commerz) Hausinvest           3.31 %      0.25 %     17.1e9 €   1972
DE0009805515  UniImmo Europa                 1.63 %      0.2  %     14.5e9 €   1985
DE0009805556  UniImmo Global                 1.91 %      0.22 %      3.5e9 €   2004
DE000A2DMVS1  UniImmo Wohnen                 1.96 %      0    %      4.8e9 €   2017
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

Alternatively, if you are in an offline setting at your bank, you can simply ask your bank consultant for the same documentation. Of course, as always, be prepared to waste some time that way, because a bank consultant usually is primarily a sales person for your bank and thus might want to use that chance to try out all the great new sales tactics he/she recently learned about.

A few years ago, the VDH (an association of independent financial advisers) published an online database of periodic funds provisions. As of 2024, one can still find traces of it on the web - but it looks like it was decomissioned some time ago:

As of 2024, consumer protection organizations are still pushing for a complete ban of kickback payments in the consulting for financial products - because of the obvious conflict of interest. In 2023, it seemed that the European Commission followed those arguments, but later stopped a reform in that area. (cf. German article by a regional consumer protection organization: Warum Provisionen in der Finanzberatung ein Problem sind, 2023-05-16)

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