As technical discussions in the European Council and European Parliament kick-off, Insurance Europe has published a series of key messages on the Retail Investment Strategy (RIS) package.
The European insurance industry firmly supports the European Commission (EC)’s objectives of the RIS: to increase retail investors’ participation in financial markets, while protecting them from mis-selling practices.
Some positive aspects exist in the proposals, including the introduction of a digital-by-default approach, more streamlined consumer information, financial education, consumer testing, and the flexibility for member states to impose further restrictions when suitable for their respective markets.
At the same time, many proposals in the RIS would make it considerably more complicated for consumers to invest and access the products and protection they need. It would further add to the already information overload and would reduce consumer choice and quality of services.
Overall, the RIS would not achieve its intended goals.
What are the solutions?
1. Allow the coexistence of different remuneration systems so that access to IBIPs is guaranteed for all
2. Remove additional requirements that will make the consumer journey harder
3. Move from a cost-centric to a consumer-centric approach
4. Favour a risk-based approach to value for money supervision
5/ Make disclosures more user-friendly and address the information overload
The potential of insurers to fully contribute to the EU's Capital Markets Union objectives should not be hindered by the RIS. Further efforts must be undertaken to ensure that the opportunities offered by the EC proposals are not wasted.