Commission should present ambitious plans to help consumers navigate capital markets

The European Commission should present an ambitious plan to protect consumers of retail financial services and incorporate recommendations from the European Parliament, said Finance Watch, the public interest advocacy group.

The European Parliament’s ECON Committee today adopted a non-legislative report, “Report on the Green Paper on Retail Financial Services”. The report recommends new measures to help consumers choose retail financial services, protect their rights, and make it clear what their money is invested in. The Commission is expected to publish its Retail Financial Services Action Plan around the end of this year.

Christophe Nijdam, Secretary General of Finance Watch, welcomed the report, saying:

Parliament’s opinion today echoes the key points from Finance Watch’s own consultation response to the Commission’s Retail Financial Services Green Paper earlier this year. Citizens rely more and more on financial markets, and retail financial services are increasingly being sold electronically and across borders. It is therefore essential that consumers are better informed before they choose financial products and better protected afterwards. We would like to see: more accessible, basic financial products being offered; a sensible way of paying financial advisors; and proper enforcement of consumer protection rules.”

MEPs noted that financial services are becoming more digitalized, consumers are relying more on financial markets for their retirement savings, and retail financial products are being promoted as a source of funding in the European Union’s flagship Capital Markets Union initiative. These factors make it more important for consumers to have a fair, transparent and accessible market for retail financial products.

In particular, Finance Watch would like to see:

  • a legislative proposal to introduce basic financial services products beyond bank accounts, such as basic investment products, and car and travel insurance. These products would not only improve financial inclusion by providing a standard fall-back option, which proved to be very popular in the UK’s pension auto-enrolment system, but also serve as a benchmark for other products;
  • the Commission addressing the continued reliance on inducements to pay for “independent” financial advice, which were not banned under MiFID II but severely restricted to cases where an advisor can prove that the money is used to improve the quality of advice given;
  • initiatives that improve financial services and competition for consumers not looking for cross-border services, and for those who are not choosing digital channels. Like reduced roaming fees, such initiatives could show citizens that Europe can also deliver tangible benefits for ordinary Europeans;
  • expansion of product disclosure rules for complex Packaged Retail and Insurance-based Investment Products (PRIIPs) to shares and other investment products; and
  • Omnibus legislation to address the patchwork of consumer protection rules across “vertical” financial services directives.

As the Parliament’s opinion is non-legislative, it is expected now to move to plenary for final adoption without significant changes. The report therefore should serve as Parliament’s response to the Commission’s Green Paper. Finance Watch calls on the Commission to take these points on board, and increase the level of ambition for its forthcoming Retail Financial Services Action Plan, now announced for year-end.


For further information or to speak to an expert on the team, please contact:

Reza Opdebeeck, Communications Officer, Finance Watch

T: +32 (0)2 880 04 40

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