In December 2025, the Council of the European Union and the European Parliament reached provisional political agreement on the legislative proposals forming part of the EU Retail Investment Strategy.
The EU Retail Investment Strategy represents a significant reform of the European Union’s retail investment framework. Its stated aim is to strengthen retail investor protection by addressing concerns around value for money, inducements, disclosures, and aspects of the client journey. The proposals include amendments to sectoral legislation and changes to the PRIIPs (Packaged Retail and Insurance based Investment Products) regime and will proceed through formal adoption before entering into force.
Although the EU Retail Investment Strategy does not apply directly to UK only firms, it is relevant for UK authorised groups with EU operations and provides broader regulatory context for expectations around investor outcomes, value, and transparency.
Policy background and regulatory objectives
The EU Retail Investment Strategy has been developed in response to long standing concerns within EU markets about the complexity of retail investment products, uneven value delivered to retail investors and the potential for conflicts of interest arising from remuneration and inducement structures.
The European Commission has framed the reforms as a means of increasing retail participation in capital markets while improving confidence that retail investors receive fair value and clear information. The political agreement reached reflects a balance between investor protection and proportionality, particularly in relation to diversified and less complex investment products.
Value for money assessments and product governance
A central feature of the EU Retail Investment Strategy is the introduction of more explicit value for money assessments.
Investment firms will be required to assess whether products provide appropriate value by reference to relevant peer groups. This represents a shift towards greater use of comparative analysis rather than reliance solely on internal product governance assessments.
To support supervisory consistency, European Securities and Markets Authority and European Insurance and Occupational Pensions Authority are expected to develop supervisory benchmarks for use by national competent authorities when overseeing value assessments.
For firms operating across jurisdictions, this may require greater alignment of product approval, review, and oversight processes, as well as clearer documentation of how value assessments are performed, challenged, and evidenced.
Inducements and conflicts of interest
The EU Retail Investment Strategy also strengthens requirements relating to inducements. Firms will be required to demonstrate that any inducement delivers a tangible benefit to the client. In addition, inducement costs must be disclosed clearly and separately from other fees and charges.
These measures are intended to improve transparency and reduce the risk that remuneration structures lead to poor outcomes for retail investors. They also increase the evidential burden on firms to justify inducement arrangements as part of their governance, oversight, and control frameworks.
Disclosures and Key Information Documents
Further changes are proposed to the PRIIPs Key Information Document regime under the EU Retail Investment Strategy.
Over time, firms will be required to provide Key Information Documents in a machine-readable format. This reflects a broader regulatory objective of improving comparability, accessibility, and the effective use of data across retail investment markets.
Although the detailed technical standards will be developed separately, firms should expect increased supervisory scrutiny of whether disclosures support investor understanding in practice, rather than merely meeting formal disclosure requirements.
Client journey and suitability considerations
The EU Retail Investment Strategy also addresses aspects of the retail investment client journey.
In certain circumstances, advisers providing recommendations in relation to diversified, non-complex and cost-efficient investment products will not be required to assess a client’s knowledge and experience as part of the suitability assessment. This is intended to reduce friction for straightforward investment decisions while maintaining appropriate investor protections.
The practical application of these provisions will depend on how the requirements are implemented and supervised at national level.
Relevance for UK firms and Consumer Duty context
The EU Retail Investment Strategy does not amend UK legislation and does not change the requirements of the FCA Consumer Duty.
However, it remains relevant for UK firms in several respects. UK authorised groups with EU entities or EU distribution activities will need to comply with the new requirements once implemented. In practice, this may influence group wide approaches to product governance, value assessments, inducements, and disclosure standards.
More broadly, the themes underpinning the EU Retail Investment Strategy align with the direction of travel seen in UK supervision, particularly in relation to outcomes, transparency, and demonstrable value, even though the legal frameworks differ.
Supervisory and market context
The EU Retail Investment Strategy reflects a continued shift towards outcomes focused supervision across European financial markets.
Supervisory authorities are increasingly concerned with how regulatory frameworks operate in practice and whether firms can evidence that retail investment products deliver fair value and support informed decision making. This direction of travel is consistent with wider international regulatory developments, including those in the United Kingdom.
For internationally active firms, EU regulatory reforms therefore remain relevant even where domestic regulatory regimes diverge.
Conclusion
The EU Retail Investment Strategy represents a significant development in European retail investment regulation. While it does not apply directly to UK only firms, it has clear implications for firms operating across borders and provides important context for evolving regulatory expectations around value, inducements, and disclosure.
Firms with EU exposure should monitor the formal adoption and implementation of the EU Retail Investment Strategy and consider the implications for product governance, remuneration structures, disclosures, and oversight arrangements. For UK firms more broadly, the Strategy serves as a reference point for the continued regulatory emphasis on investor outcomes, transparency, and accountability.
