The European Fund and Asset Management Association has warned that the Retail Investment Strategy (Ris), in its current form, risks deterring rather than encouraging retail investment due to excessive complexity and regulatory burdens. In a press statement on Monday 10 February 2025, the organisation called for significant simplification to ensure the initiative meets its objective of making investing more accessible to European citizens.
According to Efama, the Ris imposes an overly prescriptive framework, particularly through its value for money (VFM) benchmarks. The association argued that these benchmarks apply a one-size-fits-all approach that focuses excessively on costs without considering the diversity of European investment products. Efama recommended removing the VFM benchmarks and instead relying on the existing Mifid II product governance framework. The organisation suggested using peer group assessments across the value chain to determine whether products offer value for money.
Efama also criticised the so-called ‘investor journey’ as unnecessarily complex due to redundant tests and excessive disclosures. It stated that these measures discourage retail investors rather than helping them make informed decisions. The association called for a more streamlined process that eliminates unnecessary requirements while focusing on relevant disclosures. It highlighted that emphasis should be placed on key benefits such as environmental, social and governance (ESG) characteristics, qualitative features influencing investment decisions and the importance of long-term investing.
The association further opposed additional reporting requirements, arguing that they would create further regulatory burdens. It recommended leveraging existing data sources, such as packaged retail and insurance-based investment products (Priips) key information document (Kid) data and the European Single Access Point, to avoid unnecessary duplication. Efama also criticised “gold-plating” requirements, national rulemakers adding standards over and above what is called for in EU legislation, which it said contribute to regulatory fragmentation and hinder progress towards a unified savings and investments union.
Kimon Argyropoulos Niarchos, regulatory policy advisor at Efama, welcomed the European Commission’s efforts to simplify the Ris but maintained that further changes were needed. He stated that the Ris was among the most complex regulatory files in need of simplification and described the upcoming trilogue negotiations as a crucial opportunity for legislators to work towards a more accessible and competitive investment framework. He emphasised that a well-structured Ris would empower retail investors and support the creation of a successful savings and investments union.