Professionals

Questions and answers concerning financial planning

  • 1. What is the purpose of these FAQs?

    The entry into force on 1 November 2014 of the Law of 25 April 2014 on the legal status and supervision of independent financial planners and on the provision of financial planning advice by regulated undertakings and of the Royal Decree of 8 July 2014 implementing that Law has created a legal framework for the provision of advice on financial planning.

    No one in Belgium may since provide financial planning advice if without being authorized as an independent financial planner by the FSMA or without having obtained the status of a regulated undertaking.

    This being new legislation, the Parliament provided for a transition period until 30 April 2015 for those persons already active in the financial planning sector at the time the Law came into force (on 1 November 2014).

    These FAQs are dynamic in design. They are meant to answer in as concrete a manner as possible the questions most frequently asked by regulated undertakings, would-be independent financial planners and the legal advisers of these entities. The questions can be both theoretical and practical in nature. We have opted to answer each question separately and as exhaustively as possible, thereby minimizing reference to other FAQs. This inevitably leads to repetition. This document should by no means be construed as a complete or final answer to all questions concerning the new legislation. Neither should it be considered as legal advice regarding these matters.

  • 2. What does the “independent financial planner” legal status cover?

    The Law of 25 April 2014 on the legal status and supervision of independent financial planners and on the provision of financial planning advice by regulated undertakings aims to regulate activities which consist in providing financial planning advice:

    • by henceforth imposing conditions of access to the profession on all persons who are not currently subject to a status and who intend to make the activity in question their regular business, and by protecting the title of independent financial planner;
    • by laying down rules of conduct applying to independent financial planners and to regulated undertakings providing financial planning advice.
  • 3. How may I submit an application for authorization as an independent financial planner to the FSMA?

    Applications for authorization are to be submitted to the FSMA by e-mail (at opm@fsma.be) and by sending the authorization application file by post.

    The FSMA drafted a memorandum on the procurement of an authorization as an independent financial planner under Belgian law (only available in French or Dutch). Please read that document before filing your application for authorization.

    All questions regarding the application for authorization should be sent to the FSMA by e-mail at opm@fsma.be.

  • 4. Within what period of time must an application for authorization be processed by the FSMA?

    The FSMA must decide within three months of receiving a complete file whether to grant an authorization as an independent financial planner or not.

    The time it takes to process a file depends largely on the quality of the documentation supporting the application for authorization and on the timeliness of the answers given by the would-be independent financial planner to questions raised by the FSMA.

    It is advisable to contact the FSMA prior to filing an application for authorization.

  • 5. What are the costs associated with the independent financial planner status?

    Applying for authorization as an independent financial planner involves making a contribution to the FSMA. Pursuant to Article 28, § 1, of the Royal Decree of 17 May 2012 on the financing of the FSMA’s operating expenses, all companies filing an application for authorization are to contribute 2,500 euros to the FSMA to cover the examination of the application.

    Once authorized, independent financial planners are to make an annual contribution calculated as follows:

    the basic amount is increased

    • where the independent financial planner is a natural person, by 500 euros per employee empowered to represent the natural person in providing financial planning advice;
    • where the independent financial planner is a legal person, by 500 euros per person effectively running the undertaking from the second person effectively running the undertaking and 500 euros per employee empowered to represent the legal person in providing financial planning advice.

    The total amount due from the independent financial planner is capped at 10,000 euros.

  • 6. Should the independent financial planner and employees empowered to represent the independent financial planner have specific diplomas, certificates and / or practical experience?

    Pursuant to the Law of 25 April 2014, the independent financial planner and the employees empowered to represent it should be 'fit'. The assessment of such fitness will include, but will not be limited to, a review of their education and training in the four areas characteristic of financial planning: civil law, tax law and taxation, social security and socio-economic security, and the economic and financial environment.

    The FSMA will assess on a case-by-case basis the fitness of any person applying to become an independent financial planner or of any employee empowered to represent it, taking into account all information submitted in the application for authorization.

  • 7. Where an independent financial planner is a legal person, who should meet the fit and proper requirements?

    • The members of the management body of the undertaking ;
    • the persons who effectively run the undertaking ; and
    • where applicable, employees empowered to represent the independent financial planner.
  • 8. Where an independent financial planner is a legal person, the persons who effectively run the undertaking shall be named in the application for authorization. What does the concept of ‘effectively run’ mean?

    A person shall be considered to effectively run an undertaking if he or she, under whatever name or in whatever capacity (board member, manager, director, etc.), participates in the management or the policymaking of the undertaking, or exerts real influence on the de facto management of the undertaking.

  • 9. Where an independent financial planner is a legal person, the persons who exercise control over the undertaking shall be named in the application for authorization. What does 'control' of the undertaking mean?

    The concept of 'control' applies to shareholders or partners who directly or indirectly exercise control over the legal person, persons who have de jure or de facto authority to exercise a decisive influence on the appointment of the majority of the members of the company’s board or of the managers or on the company’s policy orientation.

    Pursuant to Article 5, § 2, of the Belgian Companies Code, control over an undertaking is de jure and irrefutably presumed where:

    • such control arises from the ownership of the majority of voting rights attached to all the shares or partners’ rights in the undertaking in question;
    • a partner has the right to appoint or to dismiss the majority of the members of the board or of the managers;
    • a partner has controlling power by virtue of the articles of association of the undertaking, or of agreements signed with it;
    • by effect of agreements entered into with other partners of the undertaking in question, a partner owns the majority of the voting rights attached to all the shares or partners’ rights in the latter.

    Depending on whether the undertaking is a natural or legal person, such shareholders or partners shall fill in annex 3 or 4 to the memorandum on the procurement of an authorization as an independent financial planner under Belgian law (French or Dutch only).

  • 10. Which insurers are allowed to provide an insurance policy that meets the requirements of Article 9 of the Royal Decree of 8 July 2014?

    The FSMA invites persons applying to be authorised as an 'independent financial planner' to check the list of insurance companies authorised by the National Bank of Belgium (French or Dutch only) and entitled to provide coverage against Branch 13 – General Liability risks.

  • 11. How can I check whether an independent financial planner is authorised by the FSMA?

    The FSMA publishes on its website a list of authorized independent financial planners.

  • 12. Is it possible for a person which is not a regulated undertaking to develop an activity as a ‘non independent’ financial planner without being authorised by the FSMA?

    No, it is not possible. A person may either pursue the activity of independent financial planner and must be authorised to do so by the FSMA, or he or she must refrain from pursuing such activity. The only persons allowed to develop such activity without procuring an additional specific authorization are those regulated enterprises referred to in Article 4, 3°, of the Law of 25 April 2014.

    Regulated undertakings include the credit institutions referred to in Article 1, § 3, of the Law of 25 April 2014 on the legal status and supervision of credit institutions, the investment firms referred to in Article 44 of the Law of 6 April 1995 on the status and supervision of investment firms, the insurance companies to which the Law of 9 July 1975 on the supervision of insurance companies applies, the institutions for occupational retirement provision referred to in Article 2, subparagraph 1, 1°, of the Law of 27 October 2006 on the supervision of institutions for occupation retirement provision, the insurance intermediaries referred to in Article 5, 20°, of the Insurance Law of 4 April 2014, the intermediaries in banking and investment services referred to in Article 4, 2°, of the Law of 22 March 2006 on intermediation in banking and investment services and on the distribution of financial instruments, the undertakings for collective investment and the management companies of undertakings for collective investment referred to, respectively, in Articles 3, 1°, and 3, 10°, of the Law of 3 August 2012 on certain forms of collective management of investment portfolios, and the managers of alternative investment funds referred to in Article 3, 13° of the Law of 19 April 2014 on alternative investment funds and their managers.

  • 13. Pursuant to Article 3, § 2, b) of the Law of 25 April 2014, that Law (with the exception of Article 7, § 1, 1° and § 2 on the right to use the title ‘financial planner’ or ‘independent financial planner’) does not apply to persons providing financial planning advice exclusively to one and the same family. What does the term ‘family’ mean exactly?

    The family is composed of the household, i.e. all those who dwell under the same roof, but also of all relatives forming a family group, no matter the degree of kinship.

  • 14. May a person who does not have to be authorized by the FSMA nevertheless request authorization as an independent financial planner?

    If the person is subject to a legal code of ethics which does not exclude the provision of financial planning advice, it is up to the would-be independent financial planner to check whether the professional body to which he belongs allows him to hold his current status concurrently with the status as independent financial planner.

  • 15. May the following statuses be held concurrently?

    • Regulated undertaking and independent financial planner:
      A regulated undertaking may not hold the status of regulated undertaking concurrently with the status of independent financial planner. It may however provide financial planning advice subject to the rules of conduct laid down in the Law of 25 April 2014 and the Royal Decree of 8 July 2014.
    • Payment institution and independent financial planner:
      A payment institution as referred to in the Law of 21 December 2009 on the legal status of payment institutions and electronic money institutions, access to the activity of payment service provider, the activity of electronic money issuer and access to payment systems may not hold its status of payment institution concurrently with the status of independent financial planner.
    • Real estate agent and independent financial planner:
      A real estate agent as referred to in Article 2, 4°, of the Law of 11 February 2013 organizing the profession of real estate agent may not hold its status as real estate agent concurrently with the status of independent financial planner.
  • 16. Does the exemption from the obligation to hold an authorization that applies to persons subject to a legally recognized code of ethics also apply if said person is from another member state of the European Economic Area?

    Yes, taking into account the fact that said person is subject to a code of ethics under the law of his country of origin and provided that such code of ethics does not exclude the provision of those services.

  • 17. Can the provision of financial planning advice be covered by a framework agreement?

    Yes, on condition that the independent financial planner or the regulated undertaking update all relevant information (needs and goals of the client, multidisciplinary analysis, total wealth, etc.) prior to providing new financial planning advice.

  • 18. Must the independent financial planner or the regulated undertaking make use of standardized questionnaires?

    The Law of 25 April 2014 provides that all information necessary for providing financial planning advice shall be gathered in written form, but it does not specify how this should be done.

    As far as independent financial planners are concerned, the FSMA takes the opportunity of the examination of the authorization file to check whether the manner in which the independent financial planner intends to operate will enable him or her to gather all legally required information.

    Reviews of the information gathering by both independent financial planners and regulated undertakings will be carried out subsequently.

  • 19. May MiFID or AssurMiFID questionnaires be used for financial planning?

    It is up to regulated undertakings to decide on how best to gather all the pieces of information that are relevant to financial planning.

    Regulated undertakings shall in any event gather all the information required by the Law of 25 April 2014 and its implementing Royal Decree of 8 July 2014.

  • 20. Does the provision of general information constitute financial planning advice under the Law of 25 April 2014?

    The provision of general information does not constitute financial planning advice under the Law of 25 April 2014.

    Financial planning advice refers to advice on optimizing, inter alia, the structuring, the planning, the protection, the legal organization or the transmission of a client’s wealth, according to the needs and goals stated by such client, and excludes the provision of investment advice or any advice concerning transactions in individual financial instruments.

    The provision of general information does not constitute advice specific to a client, prepared according to the latter’s needs and goals. Such information is often provided by means of newsletters or brochures intended for a general target audience (such as, for example, clients qualifying for private banking).

    Examples which do not constitute financial planning advice:

    • explaining in general terms to clients the characteristics and consequences of the incorporation of an activity, the legal implications of alternative techniques for donating property, or certain foreign tax regimes.
    • informing existing or potential clients on new legislation, on tax administration views, on certain topics that are of relevance in the context of estate planning.
  • 21. Does the provision of tailored information constitute financial planning advice under the Law of 25 April 2014?

    As such, the provision of tailored information does not in principle constitute financial planning advice under the Law of 25 April 2014, even if information is provided on the basis of a client’s particular circumstances.

    The Law of 25 April 2014 indeed only applies where the service provided is advice on optimizing, inter alia, the structuring, the planning, the protection, the legal organization or the transmission of a client’s wealth, according to the needs and goals stated by such client.

    Examples which do not constitute financial planning advice:

    • calculating of the inheritance tax owed by the client;
    • informing a client of the inheritance rules applicable in the absence of special provisions;
    • providing tax or estate planning advice supporting the offer to the client of a particular financial instrument.
  • 22. Does the provision of answers to specific questions constitute financial planning advice under the Law of 25 April 2014?

    Such answers do not constitute financial planning advice as long as the answers do not pertain to optimizing, inter alia, the structuring, the planning, the protection, the legal organization or the transmission of a client’s wealth, according to the needs and goals stated by such client.

    As a rule, the three features of specific questions are the following:

    1. they relate to a specific legal issue or a point of law concerning a specific transaction;
    2. knowledge of the client’s general circumstances is not required to provide an accurate and comprehensive answer to such questions, and
    3. the answers to these questions may be of a customized nature.

    Examples which do not constitute financial planning advice:

    • a client wishes to buy a second residence in France and wonders how to complete the transaction;
    • a client asks about the details of the mechanism of split purchase usufruct / bare ownership.
  • 23. Does the Law of 25 April 2014 apply to the provision of assistance to the client for the implementation of a wealth or estate plan?

    The requirements of the Law of 25 April 2014 do not apply to the provision of assistance to the client for the implementation of a wealth or estate plan, as no advice is given on optimizing, inter alia, the structuring, the planning, the protection, the legal organization or the transmission of a client’s wealth, according to the needs and goals stated by such client.

    Examples:

    • a client asked a lawyer and a notary directly for advice on how to structure a gift to his grandchildren:
      • they advised him to make a gift via a bank. The client asks his bank to draft the documents needed;
      • they advised him to make a gift before a notary and to establish a civil law company. The client asks his bank to opine on the draft deed of gift prepared by the notary and on the articles of association drawn up by the lawyer;
    • a client received direct advice from a notary on how to optimize his matrimonial regime or his estate. The client asks his bank to review the marriage contract or the will drafted by his notary;
    • a client has decided to donate a sum of money to his children and instructs his bank to execute this transaction on the basis of a standardized contract. Explanations and advice from the bank on the desirability of frequently used clauses in standard contract templates do not constitute financial planning advice;
    • a bank or investment firm has provided financial planning advice and the client instructs it to implement the financial plan. In this case, it is important that the financial planning team be organizationally separate from the team which offers investment services or offers the client to buy or sell financial or specific insurance instruments. A bank or an investment firm may accompany the client to the lawyer’s or notary’s office for the formalities attached thereto. However, if in the framework of this support, the client raises questions pertaining to the assessment of the planning technique, the bank or the investment firm may answer them only through a member of the financial planning team.
  • 24. Does the use of simulation tools by independent financial planners and regulated undertakings constitute financial planning under the Law of 25 April 2014?

    If such simulation tools allow for financial planning advice to be given (in other words, if those tools as such provide advice on optimizing, inter alia, the structuring, the planning, the protection, the legal organization or the transmission of a client’s wealth, according to the needs and goals stated by such client), their use shall constitute a planning activity falling under the requirements of the Law of 25 April 2014.

    Such tools shall not, however, be regarded as financial planning under the Law of 25 April 2014 if they do not allow for advice to be given on optimizing the client’s wealth.

    Example:

    simulation tools used in the provision of investment services (savings calculator or simulator to project future income based on the financial instruments owned by the client).

    Those simulation tools would therefore have to be examined on a case-by-case basis.

  • 25. May financial planning advice concern only part of the client’s wealth?

    Financial planning advice may concern only part, and not the whole, of a client’s wealth at the express request of the latter, recorded in the financial planning agreement.

  • 26. Is it possible to provide financial planning advice if the client does not want to give a complete picture of his or her wealth?

    Financial planning advice theoretically deals with optimizing a client’s whole wealth. This means that the client should give a complete picture of his wealth in order to enable the independent financial planner or the regulated undertaking to define his or her goals and needs.

    The Law of 25 April 2014 provides, however, that the client may restrict the scope of the financial planning advice by specifying which parts of his wealth should be taken into account.

    If the client refuses to give a global picture of his wealth, making it impossible for the independent financial planner and the regulated undertaking to define his goals and his needs, the independent financial planner and the regulated undertaking shall refrain from providing financial planning advice to the client in question.

    Should the case arise, the independent financial planner and the regulated undertakings may provide general information to the client or answer specific questions insofar as such questions are not about optimizing the client’s wealth.

  • 27. May financial planning advice be restricted to an analysis of the area of tax law and taxation?

    Financial planning advice should theoretically cover the four aspects provided for by the Law of 25 April 2014, i.e. civil law, tax law and taxation, social security and socio-economic security, and the economic and financial environment.

    Any request by the client that his situation not be the subject of a multidisciplinary analysis covering all four aspects must be noted in the agreement.

    A system whereby the client ticks the boxes indicating the excluded aspects should be used with caution. It is better if the client him- or herself indicates which aspects to exclude from the financial planning advice.

    The client should in any case be aware that the service provider must explain all four aspects of financial planning advice. It is then up to the client to decide whether to restrict the scope of the financial planning advice.

  • 28. May an independent financial planner or a regulated undertaking call upon external experts to handle certain aspects of financial planning?

    Yes, an independent financial planner or a regulated undertaking may call upon external experts to handle certain aspects of financial planning. The obligation of multidisciplinary analysis does not constitute an obstacle to calling on external experts, if and insofar as the independent financial planner or the regulated undertaking does not have the required expertise to deal with one of the aspects of financial planning.

    The financial planner or regulated undertaking must, however, possess the expertise necessary to take the specialized external advice into account in the overall financial planning advice. The independent financial planner and the regulated undertaking shall in any event bear responsibility for all the financial planning advice provided.

  • 29. May an independent financial planner or a regulated enterprise, in its financial planning advice, refer the client to an expert where aspects of foreign jurisdiction or law are to be addressed in the advice?

    An independent financial planner or a regulated undertaking having observed that aspects of foreign jurisdiction or law should be addressed may report in the financial planning advice that the feasibility of implementing the proposed financial plan should be checked with an expert in the law of that jurisdiction.

  • 30. What is the difference between tax law and taxation?

    Tax law is the branch of law governing taxes with regard to their base, assessment and collection.

    Taxation can be defined as the tax system that includes not only tax law but also fiscal policy.

  • 31. What is meant by 'social security and socio-economic security'?

    Social security and socio-economic security should in the first place be understood to mean an analysis of items related to the four pillars of socio-economic security and the associated taxation (state pension, supplementary occupational pension with tax incentive, individual pension with tax incentive, individual pension and investments without tax incentive).

    Depending on the client’s circumstances, other social security aspects (such as the disability and health insurance system) may in a second phase be worth addressing in the financial planning advice. The independent financial planner or the regulated undertaking is responsible for identifying which social and socio‑economic security components are relevant to the client.

    However, the independent financial planner or the regulated undertaking are not required to calculate precisely the client’s pension rights or other social security benefits.

  • 32. What is meant by 'the economic and financial environment'?

    The economic and financial environment primarily refers to global macro-economic trends (for example: inflationary or deflationary period, globally high or low interest rates, etc.) as well as to other trends of relevance considering the assets on which the client’s wealth is built.

  • 33. May an insurance company based in a member state of the European Economic Area rely on its status as regulated undertaking to provide financial planning advice in Belgium without being authorized as independent financial planner if it is not permitted to carry out this activity in its home member state?

    No, because it is not permitted to provide financial planning advice under its status in its home member state.

  • 34. May a Belgian insurance company rely on its status as regulated undertaking in order to pursue financial planning advice?

    No, a Belgian insurance company is not permitted to provide financial planning advice. Indeed, pursuant to Article 9 of the Law of 9 July 1975 on the supervision of insurance companies, the company object of an insurance company is restricted to insurance and capitalization operations or to the management of group pension funds, as well as to operations directly arising therefrom.

  • 35. May an insurance intermediary based in another member state of the European Economic Area rely on its passport in order to provide financial planning advice?

    While the scope of an insurance intermediary’s passport does not include financial planning, it does not exclude the provision of financial planning advice. This means that the intermediary is permitted as of right to provide financial planning through branches (not under the free provision of services), provided that such activity is not excluded in its home member state (see Article 34, § 3, of the Law of 25 April 2014).

  • 36. May an investment company based in another member state of the European Economic Area rely on its passport in order to provide financial planning advice under the free provision of services?

    No, because financial planning does not fall within the scope of its passport. Such investment companies may however provide financial planning advice by establishing branches (see Article 34, § 3, of the Law of 25 April 2014).

  • 37. May a credit institution based in another member state of the European Economic Area rely on its passport in order to provide financial planning advice in Belgium?

    Financial planning falls within the scope of a credit institution’s passport. This means that the credit institution is permitted as of right to carry out financial planning through branches or under the free provision of services (see Article 34, § 4, of the Law of 25 April 2014).

  • 38. Must branches of regulated undertakings based in another member state of the European Economic Area register with the FSMA in order to carry out financial planning under Article 34, §§ 3 and 4, of the Law of 25 April 2014?

    No, such branches may by right carry out financial planning without prior registration with the FSMA.

    This right is independent from the notification procedure to be followed by a regulated undertaking for the establishment of a new branch.

  • 39. May a regulated undertaking call itself ‘independent financial coach’ or ‘onafhankelijk financieel coach’ or ‘coach financier indépendant’ or any other name referring to the idea of independence?

    No, only independent financial planners authorized by the FSMA may introduce themselves to the public as being independent in the pursuit of their activity of financial planner for retail clients.

  • 40. Who may use the title of ‘independent financial planner’?

    Only independent financial planners authorized by the FSMA may legally use the title 'independent financial planner' or any similar denomination.

    Only independent financial planners authorized by the FSMA may use the words 'financial planner', or similar words, in their company name or trade name.

  • 41. Who may use the title of ‘financial planner’?

    Only regulated undertakings and independent financial planners may legally use the title of ‘financial planner’ or any similar denomination. However, regulated undertakings may not use the words ‘financial planner’ or any similar words in their company name or their trade name.

  • 42. May an independent financial planner hold power of attorney over the accounts of its clients?

    No, independent financial planners may not hold power of attorney over the accounts of their clients, except over those of family members composing their household and over those of commercial companies they effectively run.

    They may however have a right of access to the account.

  • 43. May the financial planner provide investment services to its clients or provide them with advice concerning transactions on individual financial instruments?

    No, independent financial planners are expressly prohibited from providing investment services and from providing advice concerning transactions on individual financial instruments.

    As far as regulated undertakings are concerned, financial planning and the provision of investment services will need to be operationally and organizationally separated. For regulated undertakings to comply with this operational and organizational separation requirement, the two activities must be carried out by two separate teams.

  • 44. May an account manager in a regulated undertaking hand the financial planning advice over to the client and give him or her explanations as to its content?

    The account manager may hand the financial planning advice over to the client. He or she may explain the legal terms used in the financial planning advice in order for the client to be able to understand this document. The account manager may in this context clarify or comment on the financial planning advice. Account managers making use of this right shall pay special attention to their own training regarding the techniques and the legal terms used in financial planning.

    If, during this explanation or clarification of the legal terms, the client raises questions that would bring the account manager to express an opinion on the planning technique applied, a new intervention of the specialized services within the regulated undertaking is mandatory and their intervention shall then be carried out in accordance with the law.