BETTER FINANCE welcomes the initiative of ESMA to clarify certain aspects related to the application of the MiFID II provisions on the appropriateness test and requirements for execution-only services. In addition, BETTER FINANCE commends ESMA on adapting the Guidelines on suitability assessment for the appropriateness test as the two procedures are, to a certain extent, substantially the same.
In our view, the appropriateness assessment should also ensure that any investment product or service offered has a reasonable probability to meet the client’s expectations or needs in terms of
return over his saving horizon or recommended holding period, or at least a reasonable probability not to erode the purchasing power of his savings or investment over that period.
In addition, the objective of the EU co-legislators and of the European Supervisory Authorities, in this case of ESMA, should be to simplify regulation and administrative procedures for investors, in particular, to reduce bureaucracy and documentation that a non-professional client must go through. Evidence from a BETTER FINANCE survey on the implementation of MiFID II reveals that many investors, both experienced and non-experienced, face increasing difficulties at the “point of sale”, claiming “too much bureaucracy” and many hurdles they must undergo before investing.