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EU strategy for retail investors

In “A new plan for Europe's sustainable prosperity and competitiveness”

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On 24 May 2023, the Commission tables a package of two proposals for a retail investment strategy (RIS). The first proposal is an 'omnibus' amending directive aimed to enhance confidence of EU citizens in capital markets and encourage the channelling of their savings into capital markets. It would amend five directives, namely:

  • Directive 2009/65/EC on undertakings for collective investment in transferable securities  (UCITS);
  • Directive 2009/138/EC on insurance and reinsurance (Solvency II);
  • Directive 2011/61/EU on Alternative Investment Fund Managers (AIFM);
  • Directive 2014/65/EU on Markets in Financial Instruments (MiFID);
  • Directive 2016/97 on Insurance Distribution (IDD).

The second proposal is a regulation for amending Regulation (EU) 1286/2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs) as regards the modernisation of the key information document (KID).

The RIS was part of the 2020 Capital Markets Union (CMU) Action Plan, under point 8 "Building retail investors' trust in capital markets", and is now part of the savings and investment union (SIU). The objective is to "build retail investors' trust in capital markets" and "make the EU an even safer place for individuals to save and invest long-term".

On 18 December 2025, the Council and Parliament reached an agreement; before it can enter into force, the agreement needs to be confirmed in Parliament's plenary - indicative date: September 2026 session.

The agreement provides that financial and insurance advisors would have to ensure that their products and services suit the clients' needs, based on the clients' information - e.g., knowledge and experience, financial situation, ability to bear losses, investment needs and objectives, and risk tolerance. Products that do not offer value for money would be prevented from being released onto the market, and customers would be able to compare costs, charges, performance and non-financial benefits; the EU's supervisory authorities will also develop supervisory benchmarks. New inducement test will also be conducted to ensure that investment and insurance companies act in the best interests of clients and to enable clients to distinguish "inducement" fees from other fees. Furthermore, Member States should support financial literacy and education of customers, and financial influencers activities must be supervised. Where investment firms use services of so-called financial influencers on social media to promote financial products or contracts, firms should sign a written agreement, have their contact details and control over their activities.

The new rules should be transposed within two years after their publication and will start applying 30 months following their publication, except the new rules under PRIIPs which would start applying after 18 months.

The European Economic and Social Committee (EESC) had adopted an opinion on 25 October 2023, where it welcomed the statements that there are potential conflicts of interest in the sales and distribution models for investment products, and pointed out that there is already an independent advice gap for some consumers. It also welcomed the Commission proposal to align ongoing training requirements under IDD to MiFID.

In its advice on the retail investor protection of 29 April 2022, the European Insurance and Occupational Pension Authority (EIOPA) recommended 'the idea of developing an annual statement to be disclosed to policyholders' that could enhance consumer engagement. Moreover, it highlighted the risks and opportunities created by new digital tools and channels; and the conflicts of interest in the sales process need to be tackled throughout the lifecycle of a product. Suitability assessment could also promote affordable and efficient sales process.

In Parliament, the file referral to the Committee on Economic and Monetary Affairs (ECON) was announced on 10 July 2023, and the reports were adopted in ECON on 20 March 2024. They provide for the removal of the partial ban on inducements for execution-only services which was in the Commission's proposal, and added clarifications to the concept of 'cost-efficiency' as regards the 'best-interest test'. Financial advice would be given on the basis of 'the performance, level of risk, costs, charges of an insurance based investment product or, where applicable underlying investment options'. It proposes additional elements to ensure 'clear, fair and no misleading marketing communications and to address concerns' as regards 'finfluencers'. The report also provides that the European Securities and Markets Authority (ESMA) would develop common EU benchmarks for groups of financial instruments 'manufactured and distributed in more than one Member State'. This benchmark would serve the 'sole purpose of a supervisory tool'. The report also strengthens the financial education, whereby 'Member States would define and implement informational and educational actions in order to promote and increase consumers' education and knowledge'. Moreover, the European Commission would establish a 'platform on financial education and literacy' whose purpose is to facilitate cooperation and exchange of best practice among Member States.

ECON's text was voted in Plenary in the April 2024 session.

In its position published on 19 June 2024, the Council decided to remove the proposed ban on 'inducements' received for execution-only sales, and strengthen the safeguards with additional rules. It also introduces 'overarching principles', which are not part of the inducement test as such. It also introduces a new concept of 'value for money' to ensure that investment products are offered to retail clients only if they offer good value for money. The Council agreed that the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA) should develop Union supervisory benchmarks.

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Further reading:

Author: Issam Hallak, Members' Research Service, legislative-train@europarl.europa.eu

As of 22/05/2026.