GERMANY - The federal supreme court's ruling last week on so-called kickback payments could lead to a change in fee structures, says leading German investment fund lawyer, Sven Zeller.

Zeller said on Tuesday that German banks are now required to disclose any payments received on third-party investment funds they sell.

This could herald a change in fee structure to comply with the requirements of the ruling: "The best option would be for investors to pay consultants directly," he told Börsen-Zeitung, adding that this would be the most transparent approach.

"Flat-rate fees are transparent and easily calculated, but they do not take account of interests or market conditions," said Zeller.

He also argued that "equalising everything has never been a very successful approach: in order to satisfy the new provisions, securities providers will need to disclose any kickbacks and commissions paid and may also be required to provide information on how these were calculated."

Due to increased competition, in recent years fund companies tried to propel their investment product sales by ever higher commissions. The court's ruling puts a spotlight on this practice, as banks now have to be transparent about the fees.

Herbert Juetten, managing director of the federal association of German banks (BdB) told Dow Jones Newswires: "It comes as a great surprise that banks must now communicate the amount of inventory commissions to the customer."

The judgement concerns all financial products that involve commission, including fund, certificates and life insurance.

Zeller, however, argues that the ruling will have a minimal impact on banks because "in many cases, the implementation of the Markets in Financial Instruments Directive (Mifid) requires the revision of existing contract templates and associate software anyway."