Bafin maintains that private investors still face significant risks with open-end real‑estate funds and other financial products. “Open-end real‑estate funds are legitimate products” said Bafin chief Mark Branson to the Süddeutsche Zeitung, adding that the key issue is whether they are sold correctly and fairly. “Advisory isn’t always advice; often the sale is driven by sales incentives” Branson explained.
He also expressed doubts about labeling open‑end real‑estate funds as risk‑class one-a category meant to indicate very low risk. “Risk category 1 is actually very low, even lower than many government bonds” Branson noted. “The idea that a portfolio of commercial real estate is less risky than a portfolio of German sovereign bonds defies common sense”. Some issuers have already responded by adjusting their risk assessments.
Open‑end real‑estate funds were long considered stable investments, especially those sold in large volumes by Volksbanken and Sparkassen to retail customers-frequently in the lowest risk category. However, there is a danger that funds may have to close. Recently, two smaller real‑estate funds refused redemption requests. When asked whether he could rule out further closures, Branson said, “I can’t. Smaller real‑estate funds carry heightened risk”.
Branson also voiced skepticism about the recording obligations introduced after the financial crisis. “Do they truly protect customers or rather the institutions? Who can understand these extensive documents? The system has substantial flaws: in practice it often fails because it overburdens the very customers we most need to protect” he said.
While Branson rejected the idea of a financial-distribution reform such as a commission ban, he argued it would represent a strong market intervention. “The question is whether advisory gaps would exist without commissions, since many can’t afford or don’t want paid advice. That’s a matter for politics to decide”.
