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25.04.2018 17:06 Age: 210 days
Category: Press Releases

The EC Study on Retail Investment Products Confirms a Dire Need for Simple Investment Products, More Transparency on Performance and Costs and Independent Comparison Tools

Today the European Commission released the results of its study on the current features and functioning of the European market for retail investment products.

BETTER FINANCE thanks the EC for releasing this long awaited but very necessary study on the main source of funding of the EU economy, which for this reason has also been identified as a top priority of the “Capital Markets Union” Initiative of the EU.

The study draws a grim picture detailing the obstacles retail investors face when seeking financial advice or wanting to buy an investment product.

However, this study is limited in its findings by the very limited availability and comparability of costs and charges of the retail investment products (therefore mostly focusing on investment funds which represent only 8% of EU households’ financial savings), and the fact that consumer and individual investor organisations were not properly consulted. Also, the study was conducted in 2017, i.e. before significant regulatory changes - e.g. MiFID II, PRIIPS, IDD - entered (or will enter) into force.

Retail investment products

The EC study confirms what BETTER FINANCE has been stressing for years:

An average individual investor is overwhelmed by the sheer complexity of, and uncertainty associated with, the investment products available. The information on distributors’ websites is not really transparent and not at all standardised across products and countries. As regards costs and charges some distributors either don’t display this information at all or present it only partially. Therefore, it is difficult for individual investors who are not financially savvy to find, understand and compare this information in order to make an informed investment decision and choose a suitable product. This confirms the urgent need for independent and cross-border comparison websites that support retail investors in finding the right and most suitable investment product.

Read the full press release here.


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