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Fewer financial agents after reform

THE REVISION to the law on financial advisory and mediating has brought a fundamental change in the operation of financial agents and advisers. All agents now have to undergo educational and examination procedures in order to meet the conditions for expert competence. This has resulted in a significant reduction in the number of financial agents operating in the Slovak market, the SITA newswire reported.

THE REVISION to the law on financial advisory and mediating has brought a fundamental change in the operation of financial agents and advisers. All agents now have to undergo educational and examination procedures in order to meet the conditions for expert competence. This has resulted in a significant reduction in the number of financial agents operating in the Slovak market, the SITA newswire reported.

“The number of agents decreased from 26,245 at the end of 2010 to 14,918, a drop of 42 percent,” Darina Huttová, the secretary general of the Association of Financial Agents and Advisors (AFISP), said at a press conference on February 8, as quoted by SITA. She added that in some other countries which adopted similar measures the decline was even steeper, by up to 80 percent.

The association opposes the payment of agents on a commission-only basis. Since the revision, this kind of business has come under the supervision of the National Bank of Slovakia, and registration of agents with the central bank is now obligatory.

“They have had the chance to decide whether they will accept the new rules and duties,” said Huttová.

The AFISP sees the introduction of higher demands for expert preparation and demonstration of expert competence as being one of the main reasons for the decline in the number of agents. It adds that the decline also indicates that many agents did the job only to supplement their other primary employment and, once the conditions were tightened, left the sector.

The aim of the association is to increase trust in its members and boost the reputation of financial agents.

“Times are changing; nowadays an agent mediating a financial product based only on a commission cannot survive any more,” said Huttová, adding that it is necessary to attract a client and devote ongoing attention to him or her.

Out of 14,918 registered financial agents almost 60 percent, or 8,720 agents, are members of AFISP. Agents sold financial products worth €1.029 billion in 2011.

“2012 might be better than 2011, even though external circumstances have not indicated this so far,” Rastislav Podhorec, chairman of AFISP’s board of directors, said at the press conference.

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