Date: 25th May 2023
Author: BETTER FINANCE

BETTER FINANCE was quoted in a recent Reuters article on the ongoing discussion surrounding the European Union's plans to enhance consumer protections in the financial services sector through its retail investment package. Notably, the EU aims to introduce ‘value for money’ safeguards as well as a ban on "inducements" for non-advised sales of investment products, among other developments. These measures aim to strengthen consumer trust and increase the participation of small investors in EU capital markets. However, conflicts arise as national regulators, traditionally responsible for overseeing retail financial services, express reluctance to transfer supervisory powers to EU watchdogs such as ESMA and EIOPA. Certain national regulators, banks, and insurers actively oppose the broad ban on "inducements," citing potential disruption to their widely utilized commission-based business model. BETTER FINANCE, along with other advocacy groups, supports the reinforcement of EU-level watchdogs to ensure consistent enforcement across EU member states.

“Better Finance, which campaigns for investors, said existing value for money rules were never properly enforced by member states, and bolstering EU-level watchdogs would help to change this."

"It is therefore vital to thoroughly improve the effectiveness and consistency of the supervision of the European investor protection rules, and to provide the EU supervisory authorities with the tools to achieve that," the campaigner said.”

The final decision on the proposals rests with EU member states and the European Parliament, with expected revisions that may include the potential reintroduction of a comprehensive ban on "inducements."