What is Islamic finance?
It can be associated with ethical finance. In France, the first ethical investment was made in 1983 by Sister Nicole Reille, with the help of the Meeschaert financial company. She rejected that the money be invested in certain industries (tobacco, alcohol, weapons…). Islamic finance also excludes these areas, but also responds to various rules pertaining to Islamic ethics.
For example, prohibit riba, that is, the interest received or given for a loan. We cannot lend money and get a profit in return. Nor can we invest in means that include riba (or other prohibitions) and that are traditionally offered by conventional banks or insurance companies. Despite these particularities, all the solutions implemented by Lina are, of course, approved by the Autorité des marchés financiers (AMF) and validated in terms of Islamic ethics.
How does this independent status work?
Self-employed status changed in 2018. Prior to this date, any financial adviser or wealth management adviser could call themselves independent as long as they were not attached to a structure, such as a banking establishment or insurance company. He then had two possible sources of compensation: consulting fees and commissions on products sold.
Since 2018, the Autorité des marchés financiers has specified that this independent status is only possible only on condition of being paid only by fees. A freelancer cannot charge money for the products he sells. If he receives any in the form of a commission, he must immediately return it to his clients.
How does it set you apart from other wealth management advisors?
A wealth management advisor offers to invest in financial or real estate products. In the vast majority of cases, he explains that he advises his clients “for free” by presenting them with different investment solutions. Your remuneration then depends on a feedback from the manufacturer of the financial product : bank establishment, insurance company, etc.
The commissions linked to certain investment solutions can be of the order of 8%, 4.5% or 0%. A non-independent advisor is likely to refer someone to the solution that will earn you 8% commission, even if it is less attractive to the client than the one that will earn you 4.5% or 0% commission. Therefore, we consider that there is a conflict of interest. In fact, any advice must be separated from the financial aspect, to remain benevolent and, above all, to adapt to the personal, professional and family situation of the client, as well as to their projects.
A freelance actor like Lina does not receive commission. Our only customer is still the person who contacted us for a consulting service. Then we offer you the best financial or real estate products to invest, we prepare the documents and we take care of sending the files. When the providers of the products (banks, insurance companies, management companies, etc.) in which our client has invested pay us a commission, we return it directly to our customer.
Why did you choose independence?
Lina happened to have this independent status from its creation. It leads us to total transparency, which corresponds perfectly to Islamic ethics. Avoiding these commissions allows us not to repeat the mistakes that are made daily in our sector. For example, directing a client to the Pinel system or to a SCPI with very high commissions for the advisor, instead of more suitable products, but without commission. We do not earn any interest from our various investment products: therefore we seek the best for our clients.
We are only a very small percentage of wealth management advisors working under this verified independent status. For example, we don’t charge anything for ETFs, which have a 0% subscription fee. For life insurance, the underwriting fees are 4.5% and are returned to us: therefore, we return them to our customers. The same for the retirement savings plan. For SCPI, of the 10% subscription fees, we are reimbursed 7.8%. The savings for the customers we support are considerable.
Without these commissions, what is your source of remuneration?
We have completely digitized our offer through a web application. Our clients can find the fundamentals of investing in the reports. They can thus invest serenely from their personal account, and be accompanied by an adviser, if necessary, to make sure everything is in order. It all depends on the complexity of your assets: our offer can be tailored to your needs and the complexity of your situation. This digital service is billed from 9 euros per month.
This content was produced with SCRIBEO. The BFMBUSINESS editorial team was not involved in the production of this content.
Source: BFM TV
