Make investments more accessible for ordinary bank clients

“For most people, investing in capital markets is like looking for a needle in a haystack. Intermediaries and would-be investors are drowning in paperwork while struggling to identify the key information. Moreover, there is a plethora of different EU investor protection rules that hardly fit together. It is the right move for the Commission to put order into the current chaos and look at EU investor protection rules for financial services in their entirety”, explained Markus Ferber MEP, the EPP Group Spokesman in the European Parliament’s Economic and Monetary Affairs Committee, as the European Commission is expected to unveil its long-awaited proposal for a retail investment strategy today.

The main objective of the Commission's initiative would be to streamline existing investor protection rules in financial services to make the different pieces fit better together and to empower consumers to be confident investors in capital markets, especially by ensuring that investment products are simple to understand.

“In a perfect world, the Commission would have seized the opportunity to cut all the red tape and reduce unnecessary paperwork, which will not be entirely the case, especially when seeking investment advice. However, I still welcome the improvements that allow European financial services legislation to become more coherent and especially comprehensive. People need clear info to make the right decisions for themselves.”

Among others proposals, the Commission would not entirely ban commissions (the so-called inducements) paid by investment firms and insurers to financial advisers and other intermediaries when they recommend a product to their client.

Ferber concluded: “Not going for a full ban on inducements was the right move to make. Banning commissions would have resulted in an advice gap for small-scale investors that can hardly afford to pay big fees upfront - this would have run counter to the stated objectives of the retail investment strategy.”