Retail Investment Strategy: empowered consumers, stronger EU financial markets

More than 70 % of EU citizens have never invested in financial products because they find it too complex or they have concerns about the risks. That is why Renew Europe welcomes today’s adoption by the Committee of Economic and Monetary Affairs (ECON) of the Retail Investment Strategy Package, which aims to empower retail investors by providing them with clearer and more transparent information, as well as better financial advice, while giving further tools to supervisors to act more efficiently. This will enhance retail investors’ trust, confidence and protection to safely invest as active markets participants and take full advantage of the potential of the EU’s Capital Markets Union.

MEP Stéphanie YON-COURTIN (L’Europe Ensemble, France), Renew Europe´s Coordinator on Economic and Monetary Affairs Committee (ECON) and rapporteur on the Retail Investment Strategy Package, stated:

“This strategy is a major step forward to complete our Capital Markets Union, especially given the massive investment gap to finance EU priorities. These new rules will enable citizens to better navigate financial markets, build on new digital financial trends, give additional tools to supervisors to act more efficiently and preserve the competitiveness of our companies, especially SMEs. I fully regret the obstructionist attitude of our left-wing colleagues in this House who are already in election mode, as they decided to walk away from the negotiating table, putting at risk the adoption of such relevant legislation".

Under Renew Europe’s leadership, the final compromise strengthens value for money requirements in the overall value chain, by giving more responsibility to the management levels of companies over the compliance with the product governance rules. Moreover, national competent authorities will be able to use benchmarks as a supervisory tool. These will allow them to screen the market using a risk-based approach and take corrective actions if necessary.

In addition, we negotiated hard to ensure a more protective framework for consumers, where retail investors must be tailored to their specific needs and objectives and conflicts of interests on financial advisors’ inducements should be addressed via increased transparency, delivering a right balance between the benefit of citizens and companies’ competitiveness, especially for SMEs.

The adopted legislation also addresses the new challenges posed by online actors such as “finfluencers”, which have become “financial advisors 2.0”, preventing misleading marketing communications and harmful decisions for customers due to lack of knowledge. Finally, the compromise ramps up financial literacy measures for consumers, with the creation of a EU platform on financial education, which will contain representatives of each Member State, European supervisory authorities, ECB, EIB, consumer organisations and European financial industry federations.