NFU publishes position paper on the Retail Investment Strategy

NFU is today publishing a position paper on Retail Investment Strategy on the proposed changes to Directive 2014/65/EU on Markets in Financial Instruments (MiFID). In this paper, NFU highlights the opportunities, risks, and challenges with the proposed changes of the directive.

NFU encourages the European Commission’s intention to boost more consumers to participate in the retail investment market. NFU also endorses the proposal to make the sales process more transparent, improve comparability, and, in that way, improve the value of financial advice, regardless of whether the advice is provided online- or offline and the measures to improve disclosure of sustainability objectives. In the position paper, NFU also highlights financial advisors’ vital role in ending financial literacy and the importance of allocating enough time to provide financial advice.

However, a major risk NFU emphasises in the position paper is the proposed inducement changes. NFU disagrees with the assumption that this will encourage more trust in the capital market and fears that this factual ban on kickbacks can, contrary to its aim, cause financial institutions and their advisors to offset reduced income from banned kickbacks with higher costs elsewhere, which might not be in clients’ favour.