Responsible marketing, responsible sales
Responsible marketing and advisory practices in Germany are regulated by law. Deutsche Bank has also developed supplementary internal guidelines covering that area.
Legal directives require the Bank to act in the interest of clients, to avoid conflicts of interest, to disclose costs and fees (subsidies), thus prohibiting transactions that are not in the interest of its clients. There are legal requirements governing the content of marketing and product documentation. Those are fair and clear. So-called small print is not allowed. The law also regulates what documents have to be handed over and when. Those regulations are also reflected in the policies and directives of the bank.
Policies and directives of the bank
The Compliance Directive regulates “customer orientation / suitability”: every employee is required to best ensure that his/her work is always geared to the interests of the client. Employees must be sure that the client understands the characteristics, operation and thus the risk of a product and that the recommended product is in line with the latter’s personal objectives, particularly investment horizon and risk appetite, as well as the client's financial situation.
In addition, the Directive for Securities Transactions with customers ensures suitability and transparency in advisory operations. With that policy, Deutsche Bank ensures that clients are only offered products which are suitable for them and that they understand the risks. It also stipulates what documents and what information are to be given to the client (e.g. regarding risks and costs) depending on the complexity of the products. In the directive, Deutsche Bank has also specified the groups of people for whom certain products may not be available. For example: no products with long term and limited tradability for people over 70 years of age.
As far as advertising measures are concerned: cold calling, phone calls, aggressive advertising and marketing methods are only allowed in Germany if the customer has expressly requested them and not just when the customer does not reject them. That is regulated by law in Section 7 of the German Act against Unfair Competition [Gesetz gegen den unlauteren Wettbewerb (UWG)]. Commercial practices that cause undue harassment for a market participant are prohibited. That applies in particular to advertising when it is evident that the targeted market participant does not want the advertisement.
Acting in the interest of clients
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An effective control and monitoring system is a necessity in order to manage a company with global activities such as Deutsche Bank. We have established sophisticated processes and structures for this purpose.