In the Swiss finance industry retrocessions are kickback commissions that banks, asset managers, trustees and financial service providers receive after purchasing financial products such as funds, obligations, structured products, etc. from the distributors of the products. Retrocessions have been heavily criticized, due to a possible conflict of interest and a lack of transparency in the past. The Swiss federal tribunal has stated on various occasions that commissions create a conflict of interest as a bank is incentivised to acquire a certain product, whereas the operation is not justified with regards to the interest of the client. In the European Union a major transformation of the financial market has led to a number of regulations that intend to make the financial industry more transparent and accountable. Retrocessions are a type of inducement that are considered non-transparent and therefore regulators have sought a way to drastically reduce them or even ban them completely. As of 2019, inducements are completely banned in only three countries of the EU (the UK, Denmark and the Netherlands). Broadly used synonyms for retrocessions are finder's fee, referral fee, sales commission, acquisition commission, hidden commission, or, as above mentioned, kick-back commission. History Retrocessions have for many years been a well-established, common and lucrative business model for Swiss banks, asset management companies and financial service providers. According to a study published by Finalix AG, retrocessions accounted for an estimated 12.4% of the Swiss banking sector's added value in 2012., amounting to CHF 4.2 Billion. Retrocessions are a form of financial inducement that Swiss banks and asset managers received from asset managers, whose products they pushed to their wealth management clients. Criticism Conflicts of interest It is argued that banks and asset managers face a conflict of interest when buying financial products that pay a certain percentage in kick-back commissions. When deciding on which fund or structured product to buy, the asset manager in charge should merely act in the interest of his client and hence buy the fund, share, structured product etc. with the best performance. However, as kick-back commissions vary broadly between 0.5 and 2% and in most cases are paid back to the buyer independently from the financial product's performance, the bank or asset manager might aim to maximizing profits by buying products that pay the highest retrocessions. The BaFin, the German Federal Financial Supervisory Authority, gives the following example: “If a bank receives a commission from