On 24 August 2026, the European Commission (the Commission) published its request to the European Securities and Markets Authority (ESMA) to provide technical advice on implementing key aspects of the Retail Investment Strategy (RIS). The RIS is designed to encourage greater retail participation in EU capital markets while ensuring stronger investor protection, better value for money, and simpler investment journeys for consumers. The Commission reached a provisional political agreement on RIS in December 2025 and expects final publication in early 2027, with application from mid-2029.
Summary
The Commission has highlighted the following key areas in relation to the advice it is seeking from ESMA on the RIS:
- Value for money (VFM) framework: A central theme is the introduction of a new VFM framework across the Markets in Financial Instruments Directive (MiFID II), the Undertakings for Collective Investment in Transferable Securities (UCITS) Directive, and the Alternative Investment Fund Managers Directive (AIFMD). Manufacturers and distributors of retail investment products will be required to assess whether products provide appropriate value for investors. The Commission asks ESMA to develop criteria for establishing peer groups of comparable products, assessing costs, charges, inducements and performance, and identifying products whose costs are disproportionately high relative to benefits delivered. The aim is to prevent poor-value products from being marketed to retail investors and to require corrective action where products cease to offer value. ESMA is also asked to ensure consistency between the various legislative regimes and to develop practical, proportionate methodologies that avoid excessive compliance burdens.
- Inducements: The RIS reforms the MiFID II inducement regime by introducing a new test designed to ensure that fees, commissions and non-monetary benefits do not undermine firms’ obligation to act in clients’ best interests. ESMA is requested to advise on criteria for determining when an inducement provides a tangible benefit to a client and when its level is proportionate to both the product and the service provided. The Commission also asks ESMA to review existing Level 2 rules to ensure they remain consistent with the revised legislative framework and support investor protection while avoiding unnecessary complexity.
- Simplifying the retail investor journey: Building on ESMA’s March 2026 report on the retail investor experience, ESMA is invited to identify regulatory or supervisory requirements that are duplicative, outdated or unnecessarily burdensome. The objective is to reduce friction points for retail investors and make investing more accessible while preserving appropriate safeguards and particular attention should be paid to how risks are communicated to investors and to cross-border issues affecting firms operating across multiple Member States.
- Suitability and appropriateness assessments: The RIS seeks to make these assessments more proportionate and focused on genuinely relevant information. Firms will be expected to collect only information that is necessary, explain the purpose of assessments to clients, warn clients when products are inappropriate, and provide clients with copies of information collected upon request. ESMA is asked to advise on what information firms should gather and to develop criteria for identifying non-complex products exempt from appropriateness assessments. It is also asked to define the characteristics of products that can be recommended through a new category of simple advice, which is intended to facilitate access to investment advice for retail consumers through recommendations limited to well-diversified, non-complex and cost-efficient products.
- Marketing communications: The revised framework aims to tackle risks associated with social media, online advertising, influencers (‘finfluencers’) and behavioural techniques that may distort retail investors’ decision-making. Across all topics, the Commission emphasises proportionality, coherence across different EU legislative frameworks, evidence-based policy design, consumer testing where appropriate, and the broader objective of simplification and burden reduction for both firms and investors.
Next steps
ESMA is required to deliver the requested advice by 1 October 2027.
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