Date: 3rd August 2021

BETTER FINANCE welcomes this consultation from the EC on a much-awaited and needed strategy for retail investors, and fully supports its clearly stated objectives, as defined in the EC CMU Action Plan and in the web consultation itself:

  1. adequate protection,
  2. bias-free advice and fair treatment,
  3. open markets with a variety of competitive and cost-efficient financial services and products, and
  4. transparent, comparable and understandable product information.

The consultation webpage also rightly adds:

  • ensure that a legal framework for retail investments is suitably adapted to the profile and needs of consumers,
  • helps ensure improved market outcomes, (although it is difficult to identify questions related directly to these key issues except on value for money),
  • empowers retail investors
  • and enhances their participation in the capital markets.

In BETTER FINANCE’s view, the current retail investor protection framework falls short of achieving its purpose for the following reasons:

  • Very little access to bias-free investment services, resulting in little access to investment products that are closest to capital markets and to the real economy such as low-cost index ETFs, listed equities and bonds;
  • Different standards of investor protection across sectors / product categories;
  • Inadequate key disclosures;
  • Extreme difficulty to obtain redress for individual investors;
  • Inadequate client categorization;
  • Inadequate rules on product oversight and governance;
  • Insufficient safeguards for sustainable finance;
  • Under-developed employee share ownership;
  • Need for an EU-wide cross-sectoral conduct of business supervision (“Twin Peaks”)


  • Read the full text below.
  • Read Annex 1 here.
  • Read Annex 2 here.