Asset management and other bodies said the proposed timeline to implement the recently proposed EU Retail Investment Strategy is not feasible.
The European Fund and Asset Management Association (Efama), along with other representative groups of the European financial services industry, said the proposals were “far-reaching”.
Efama along with Amice, EACB, EAPB, EBF, ESBG, EUSIPA and Insurance Europe, released a joint statement to set out their initial reasons for concern, including the measures in the Retail Investment Strategy to prohibit commissions.
It said that the new “best interest of the client” test disproportionately focused on costs, which could lead to investors choosing the cheapest products available, not necessarily the ones that would offer the greatest value.
It also said that the primary goal of the Strategy – to reduce the complexity of retail investment and help encourage new investment – was overshadowed by the number of new processes, policies, organisational requirements, technical disclosures and compliance obligations it introduced.
Efama said that the “overwhelming” requirements added complexities that were highly likely to discourage consumer engagement, and claimed the goal of turning European depositors into investors would be obstructed by an even longer, more complex and more burdensome investment process.
It also expressed concerns that the new strategy placed too much emphasis on cost when assessing the value of investments, introducing a ‘one-size-fits-all’ benchmark unsuitable for a market where value has different meanings for different people.
The organisations said they supported the objective of the strategy overall, and particularly praised the shift towards ‘digital-by-default’ communication, as well as the effort to streamline disclosures and to further promote financial literacy.
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