EFAMA warns EU retail investment strategy needs 'significant simplification'

The European Fund and Asset Management Association (EFAMA) said today (10 February) that the EU Retail Investment Strategy (RIS) in its current form will not achieve its goal of making investing more accessible to European citizens.

The statement said "it introduces excessive complexity and regulatory burdens that could ultimately deter, rather than encourage, retail participation. In order to stand a chance to deliver on its objectives, the RIS needs urgent simplification. EFAMA stands ready to support this effort and is pleased to provide its recommendations."

Its key recommendations include:

• Delete the Value for Money (VfM) benchmarks, which impose a one-size-fits-all, overly cost focused framework that does not reflect the diversity of European products. Instead, the RIS should rely on the existing MiFID II product governance and consider using peer group assessments, across the whole value chain, to determine whether products provide VfM.

• Simplify the investor journey by eliminating redundant tests and excessive disclosures, which currently make investing overly complex and discourages retail investors.

• Focus on relevant disclosures emphasising key benefits like ESG characteristics, qualitative features that drive investment decisions, and the importance of investing with a long-term horizon.

• Avoid additional reporting requirements, and instead leverage existing data sources like PRIIPs KID data and the European Single Access Point.

• Eliminate gold plating requirements, which create fragmentation and prevent a unified Savings and Investments Union.

Kimon Argyropoulos Niarchos, regulatory policy adviser, said: “The Commission’s simplification efforts are a welcome step toward a more accessible and competitive investment landscape. There is no better example of a file more in need of simplification than the Retail Investment Strategy.

"The upcoming trilogues present a crucial opportunity for co-legislators to work together to deliver a simpler, more effective framework—one that truly empowers retail investors and helps lay the foundation for a successful Savings and Investments Union.”