Markets in Financial Instruments Directive (MiFID) II has been published in the Official Journal of the European Union back in June 2014. As with every EU directive, the Member States must now transform it into their national law within a given time frame. MiFID II will apply from January 2017 on.
One of the major novelties MiFID II will bring is the requirement for regulated firms to disclose to its clients all costs and charges they are paying for having their money looked after, and that in a single one figure. Wealth managers and private banks across the EU are – to put it mildly –feeling uneasy about these provisions. 
Clients will be faced with the real price of their investments, which might surpass their wildest suspicions. The wave of dissent might resemble the one which followed the publication of a study undertaken by Numis Securities earlier this year, although this study was known only to a fraction of all financial services consumers. Their findings showed that annual charges can be as high as 7.48%.
For obvious reasons, the industry is keen on keeping the information regarding costs and charges as opaque as possible. MiFID II should finally bring some light in these muddy waters. (Image source)
Although BETTER FINANCE strongly supports MiFID II, our support is not without reservations.
In particular, BETTER FINANCE is concerned about fixed-price transactions. Thus far, disclosure of inducements is restricted to commission-based transactions only. However, fixed-price transactions provide investment firms with an equal possibility to create sales disincentive by financing distributional channels via product margins. Firms thus face incentives to sell product via fixed-price transactions to circumvent the direct flow of commissions. With respect to the ban of commission for independent financial advice, the “fixed-price transaction loophole” threatens the intended impact of MiFID2 on distributional channels.
Read more about our position on MiFID 2 here.