Retail Investment Package

EU Retail Investment Strategy: not in consumers’ best interests


Insurance Europe is concerned that the overall impact of the many new requirements in the European Commission’s Retail Investment Strategy proposals will make consumers’ investment journey much longer, more complicated and more intimidating than before.

Within a properly designed legislative framework, insurance-based investment products are key to consumers investing with confidence in capital markets, accessing insurance protection and preparing for old age. So, Insurance Europe is strongly supportive of the European Commission’s stated goal for its Retail Investment Strategy of increasing consumers’ trust in financial services and encouraging their participation in capital markets. And Insurance Europe welcomes the efforts in the Commission’s proposals to make the legislative framework more digital-friendly, to streamline consumer information and to promote financial education.

However, there are three new bans on commissions for execution-only sales, non-advised sales and independent advice. In addition, new excessive requirements for the payment of commission under the additional “best interest” test for other advised sales are proposed. Moreover, the introduction of “value for money” benchmarks on costs and performance are likely to result in price-setting. Put together, these measures will not result in better outcomes for consumers. In fact, they will run counter to the goals of the Strategy; they will significantly restrict consumers’ access to investment opportunities and are likely to increase the current pension and protection gaps.

Insurance Europe strongly believes that consumers are best served when they receive simple and clear information, have easy access to investment opportunities, to insurance protection and to advice when they need it and can choose the products and services that fit their needs and preferences. The Retail Investment Strategy proposals fall short in these areas.

Insurance Europe will continue to analyse the details of the proposals and to highlight how insurance can contribute to closing the pension and protection gaps.