(Quick note before we start: the thoughts in this post are mine and mine alone. I’m not trying to criticise colleagues or publicly call out the industry. I’m simply sharing what I’ve learned from working in the Czech financial market and what I think clients deserve to understand.)

If you’ve read my previous post, you’ll know I’m not a fan of the idea that a financial advisor is just someone who “sells products". Done properly, the job is much more like planning, translating, and helping you avoid expensive mistakes.

This post is the next layer down. It’s the one people usually ask for after the first meeting, when the initial trust starts to form and you naturally want to understand the structure behind it:

• Who regulates financial advice in the Czech Republic?

• What does “independent” actually mean here?

• And how do advisors get paid - without it turning into something dodgy?

I’ll keep it plain, practical, and human. No legal lecture.

The ČNB: Who's actually in charge?

In the Czech Republic, the main supervisor of the financial market is the Czech National Bank (ČNB). It’s the central bank, and it’s also the regulator.

In real-life terms, the ČNB sets the rules for who is allowed to provide financial services, what they must disclose, how they should communicate with clients, and what happens when someone crosses the line. Regulation is never perfect, but it does mean the market isn’t a free-for-all.

There’s one very practical thing I always tell people: the ČNB keeps a public register. You can search for a person or company and see whether they’re registered and under what status (here is me). It takes a couple of minutes, costs nothing, and it’s one of the simplest ways to protect yourself from “too good to be true” offers.

“Independent” in CZ: the label is easy; the reality is… not

The word “independent” is used constantly in finance. Sometimes it’s used correctly. Sometimes it’s used because it sounds reassuring.

What matters isn’t the label – it's the structure behind it. In the Czech Republic, you’ll most often meet advisors in one of the following models. I’m not saying one model automatically produces good or bad advisors. I’m saying each model has built-in incentives and limitations, and you deserve to know what they are.

1) The single-company advisor (the captive model)

This is the most straightforward setup. Some advisors are tied to one specific provider – for example, one insurance company or one bank.

If you work with an advisor in this model, you’re getting advice and solutions from that provider’s catalogue. That can be perfectly fine if you already know you want a particular company’s product and you just need help choosing within their range.

But if your aim is comparison across the market – different insurers, different banks, different approaches – this structure is naturally limited.

So, for holistic financial planning, this is usually the category I’d approach with caution.

2) The truly independent advisor (the “rare unicorn”)

A truly independent advisor (in the regulatory sense) is someone who operates under their own direct permissions and infrastructure, without a principal broking firm above them.

In theory, it sounds like the best of all worlds: total freedom, the broadest possible market access, and a clean separation from any large organisation.

In practice, it’s complicated. Running an independent, fully regulated practice in CZ is expensive and admin-heavy: professional insurance, legal support, compliance processes, systems, audits, and a long list of responsibilities that most people never see.

That’s why truly independent advisors exist, but they are extremely rare (think like 1% rare or so). And it’s also why they are not automatically “better” for every client. A few practical trade-offs clients don’t always think about:

• They may have a smaller set of active partnerships than a large broking network, simply because one person can’t realistically keep contracts and processes running with dozens of providers.

• They often don’t have large internal support teams.

• They may charge direct client fees (which can be totally fair – but it should be very clear upfront, and those fees can be quite steep).

3) The brokerage / intermediary-tied agent (vázaný zástupce)

This is the most common structure in the Czech Republic, and it’s the one I work under.

A vázaný zástupce (tied agent) operates under the licence and responsibility of one principal firm. In my case, that principal is OVB Allfinanz, a.s.

Here is the distinction that matters:

• I am legally tied to OVB (that’s the regulatory status).

• OVB is not a bank or insurer producing its own “house products” (that’s the product side).

A brokarage company is an intermediary. It has partnerships with a range of banks, insurance companies, and investment firms. So in everyday client terms, when you are working with me, you are not choosing “OVB products" – you are choosing from a range of providers within a supervised framework.

What does this arrangement mean for you as a client?

• You usually get comparisons across multiple providers (not just one brand).

• There is a clear responsibility and oversight structure above the individual advisor.

• The principal firm is legally responsible for tied agents.

• Tied agents cannot charge clients for services directly, but are responsible for following the code of ethics and ČNB regulations

The honest limitation is also simple: the comparison is within the partner range. It won’t include every niche product that exists on earth. But in practice, most clients don’t need “every niche product" – they need a sensible choice set and someone who can match it to their situation.

A small (but important) nuance: not all brokerages stay equally “neutral” over time

I’ll say this gently, because it’s easy for this topic to become emotional.

Some big broking groups in the Czech Republic have grown to a point where they started building their own products – for example, their own insurance company, pension company, or even a bank.

Does that automatically make them bad? No.

But it does change the incentives, and it’s fair for clients to ask the question: how is “independence” managed when a group has in-house brands as well as external partners? Some companies handle these issues responsibly. Some may push harder internally. You can’t know unless you ask.

My general advice is simple: don’t get stuck on branding. Ask what is being compared. Ask why a product is recommended. And if an advisor gets uncomfortable with normal questions – that's information, too.

Let’s talk about money: how are advisors paid in CZ?

This is the question that sits behind almost every client’s hesitation. And honestly, I understand why.

In the Czech Republic, under the intermediary tied-agent model, you typically do not receive a separate invoice for “financial advice hours.” So you won’t get a bill from me for “two hours of consulting.”

Instead, the advisor is usually paid through commission from the product provider when a product is implemented (mortgage, insurance, investment product, etc.).

The key point – and I’m saying this slowly on purpose – is this:

Commission does not mean you pay more than if you went directly to the bank or insurer. Actually, you, as a client, do NOT pay extra commission – the institution does.

Often the client price is the same as going direct or smaller. Sometimes the conditions are more or less comparable. Often they are better, depending on the provider and current offers. Anyone promising “always better” is overselling.

Why does this commission model exist at all? Because it can genuinely work as a win-win.

• The provider gets a client and doesn’t have to pay the full cost of a large internal sales force.

• The advisor does a lot of work: analysis, setup, paperwork, follow-up.

• The client gets support, structure, and someone who knows the process (and would be speaking an accessible language, as well as actually being nice to you, right? :D).

And here is one more reality that people rarely think about: if an advisor spends many hours on your case and nothing is implemented in the end, the advisor often gets paid… nothing.

That doesn’t mean you “owe” anyone. You don’t. You should never be pressured.

But it does explain why ethical advisors focus on long-term relationships. If you work properly, you build trust over years. If someone tries to squeeze people fast, you burn your reputation – and the market here is smaller than it looks. Besides, the client always has the final say: if the product isn't for you, you can cancel it. And the financial advisor can get the cancellation fee for it or the whole commission revoked.

So no, there is no real danger. You are in control.

My personal “payment” policy

I personally do not and can NOT accept cash payments for advice. But I do accept something else as a form of “thank you”: introductions.

If I’ve genuinely helped you – saved you stress, brought clarity, helped you choose something that actually fits – then the best compliment is simply sending a person or a few my way. A colleague lost in the mortgage process. A friend who needs to sort out insurance properly. Someone who keeps postponing pension planning. A neighbour who can never start...

I’m happy to help, and I’m grateful for referrals because they’re built on trust.

Why your advisor’s status should be visible (and verifiable)

This might sound like a technical detail, but it matters more than people think.

When you talk to an advisor, you share sensitive information: income, family situation, sometimes health details, and long-term plans. You deserve to know exactly who you’re dealing with, under what licence, and who is responsible for the advice.

That’s why an advisor’s status (for example, tied agent of a specific principal firm) should be clear on websites and in client communication. And again: please use the ČNB register. It takes two minutes.

Final thought

If you take one thing from this post, let it be this: labels like “independent” are not enough. And might not actually tell you a lot. Ask how the advisor is regulated, what they can compare, and how they can really help you.

A good advisor won’t get defensive. They’ll explain it clearly, calmly, and without marketing glitter. And working under a brokerage company does not mean the advice is biased or not independent.

If you ever want to talk through your situation, I’m here for a normal conversation – no pressure, no drama. Simply contact me with questions and to arrange the free consult.

If you want to learn more, join the Financial Breakfasts I'm organising. Short free learning sessions that tell you more about how the financial markets work here in the Czech Republic. Grab a coffee, relax and join in on the learning, growing, and empowering yourself!

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Contact

liubov.borisova@ovbmail.cz

+420 777 672 834

© Mgr. Liubov Borisova, PhD, 2026.
All rights reserved.

Portraits by Raifa Slota

Slezská 874/36, Prague, CZ

Mgr. Liubov Borisova, PhD
IČO 19929889

Services are provided by Liubov/Ljubov Viktorovna Borisova as a tied agent (vázaný zástupce) of OVB Allfinanz, a.s., with a registered office at Prague 4 – Chodov, V Park 2343/24, 148 00, ID No.: 48040410. In accordance with Czech financial market regulations.