Consumers saved 15% on mortgages since provision scrapped

The implementation of the provision ban, which took effect on January 1st 2013, has led to 15 percent savings for consumers. This is according to the annual survey done by GfK on the effects of the ban on provision. The provision ban means that financial advisers may no longer receive commission from a provider, but can only be paid for their advice by the consumer. According to GFK, this means that consumers gain insight into the cost of financial advice and it has sharpened the competition between financial advisers. The hourly rate paid by consumers decreased from an average of 122 euro per hour in 2012 to an average of 107 euro per hour last year. The average cost for a mortgage advice was 1,700 euro last year, where the costs previously could have amounted to up to 3 thousand euro. The implementation of the provision ban ha lead to a decline in revenue for two thirds of the financial advisers. Half of this group saw a decline of more than 20 percent. The vast majority (98 percent) of independent financial advisers think that the provision ban creates an unfair situation in the market, as banks do not have to live off advisory fees and can keep their advice costs low.