Knowledge is power

Our legal go-to Antonio Flores reveals all you need to know about Spain’s money merchants

LAST UPDATED: 16 Sep, 2015 @ 19:14

PEOPLE move to Spain for an easier life but bureaucracy and legality can be a minefield.

moneyThis must-read Q&A demystifies the Independent Financial Advisors in Spain (EAFI) for all your money queries.

What is an EAFI?

An EAFI firm provides independent financial advice based on professional and customised recommendations. It is the equivalent to the UK-regulated IFA (Independent Financial Advisor).

EAFIs are rigorously regulated – they must comply with a staff code of conduct; offer a customer attention desk and collaborate with the anti-money laundering department of the Bank of Spain.

Regulation of EAFIs originate in European Union Directives and, in Spain, are implemented by the Securities Markets Law, the Royal Decree 217/2008 and especially, by Resolution 10/2008 on EAFIs.

What are the requirements?

EAFIs must be authorised and registered by the equivalent of the Financial Conduct Authority, the CNMV. The CNMV supervises the EAFI’s activity, requiring its team to meet standards and proove their expertise and knowledge.

Not just anyone can be an EAFI: despite a huge number of requests, the Spanish Financial Services Authority has so far authorized just 90 EAFIs.

How do they get paid?

Up to 70% of the EAFIs get paid solely by the client and do not receive commissions from financial entities, claims the Spanish financial regulator.

How do insurance brokers and EAFI overlap?

It is normal for insurance brokers with a license to sell products that have a marked financial component i.e. ‘unit linked’ insurance policies or pension plans. EAFIs, however, are not allowed to advise on, market or sell these products without an insurance license, granted by the Spanish insurance regulator (the DGS).

Equally, insurance brokers with a valid EAFI license cannot advise on, market or sell financial investment products.

What about EU-registered EAFI?

Companies and individuals can be granted a license to ‘passport’ their business into Spain by virtue of the Freedom to Provide Services agreement under the European Directive 92/96/EEC of 10th November 1992 (the Third Life Directive), which enables suitably regulated companies to offer cross-border advice.

Some companies have been authorized in operate in Spain but have since lost their ‘passport’ and therefore are no longer able to provide their services.

How do I check if a company is EAFI-registered?

There are two ways to know if a company is registered to legally provide independent financial advice:

1- Checking with the CNMV (

2- Checking with the country of registration to find out if it has a valid ‘passport’ to operate in Spain.

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Lawyer Antonio Flores is the legal columnist for the Olive Press. Antonio has been practising law since 1997, year in which he began working for a large law firm in Marbella as a Property Lawyer. In 1998 he left the company he had joined a few months earlier, and used his knowledge and the experience gained to build his own practice. He is known throughout the community as independent, reputable and trustworthy. Through a combination of strong work ethics, determination and international exposure, his competence of Spanish Law is unparalleled and demonstrated through his fluency in English and Spanish.