Retail Investment Strategy: Positive elements for European Investors and ones that should be reconsidered

EFAMA has actively engaged in the ongoing discussions surrounding the EC’s RIS, currently undergoing scrutiny within the EP and Council. EFAMA has highlighted several positive elements in the strategy, along with crucial areas that warrant reconsideration.
Among the positive elements, EFAMA supports the integration of digital disclosure documents, promoting user-friendly technologies for enhanced accessibility. They also advocate for alignment across different financial products, emphasizing the need for consistency between investment (MiFID) and insurance (IDD) products. Financial literacy initiatives, marketing rules for influencers, and the maintenance of both commission and fee-based models for accessing investment advice are also endorsed.
However, EFAMA recommends reconsiderations in certain aspects of the strategy. They propose the removal of quantitative ‚value-for-money‘ benchmarks, suggesting a shift towards qualitative assessments across the entire value chain, involving product manufacturers and distributors, overseen by NCAs. The association advises against the inclusion of the ’best interest‘ test, proposing an extension of the existing quality enhancement test to cover insurance products.
EFAMA opposes the outright ban on commissions for execution-only trades, as it could hinder access to digital trading platforms. Instead, they recommend applying the quality enhancement test to ensure commissions contribute to improving investor services. The association also cautions against the addition of potentially unclear or repetitive dashboards in investor disclosure documents and proposes a dynamic implementation deadline set 18 months after essential technical standards are developed by ESMA.