Guillaume Prache, Founder and Senior Advisor at BETTER FINANCE, brought his expertise to the forefront today as he addressed representatives of the financial industry at a roundtable on retail investment in the EU, convened by the European Commission. Prache's intervention at the roundtable emphasised the critical need for innovation in the financial industry to prioritise consumer outcomes over rearguard battles.
Prache began by expressing gratitude to the European Commission for its commitment to a Capital Markets Union (CMU) that truly benefits the people. However, he highlighted a concerning trend of the European industry's failure to acknowledge and address core issues, instead opting for short-sighted defensive strategies, at the expense of its mid-term competitiveness vis-à-vis non-EU players.
His remarks underscored the absence of crucial considerations in the industry's proposals, such as performance, value for money, and conflicts of interest. Prache pointed out that while several individual industry players are making real efforts, like standardising trailing sales commissions, the report fails to recognise these as potential ways forward.
Moreover, Prache challenged the notion of blaming consumer ignorance, stressing the importance of high-quality, independent financial education and advice. He urged industry players to embrace Eurogroup priorities aimed at enhancing retail investor participation through accessible, simple, transparent, and cost-efficient investment products.
While the report of the industry trade associations rightly copied one of the Eurogroup’s key proposals – “Facilitate the strengthening of an investor/shareholder culture among EU citizens to increase retail participation” – they ignored the two main ones of the Eurogroup on retail investments:
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