Political Agreement on the EU Retail Investment Strategy – New Framework for Retail Investors is On the Way

On 17 December 2025, the EU Council and Parliament reached a political agreement on the Retail Investment Strategy package (the “RIS Package”), which aims to strengthen the protection of retail investors while boosting their participation in capital markets.

Background

This political agreement puts an end to the intense negotiations that followed the EU Commission’s original proposal published on 24 May 2023. The RIS Package will revise a number of sectoral EU legislative texts governing rules applicable to retail investors including the UCITS Directive¹, the Solvency II Directive², the AIFM Directive³, the MiFID II Directive⁴, the IDD Directive⁵, as well as the PRIIPS Regulation⁶.

Key changes

• New concept of “Value for Money”: manufacturers and distributors will be required to identify and quantify all costs and charges borne by retail investors in connection with a product to ensure, based on agreed standards, that they are justified and proportionate. If not, the product should not be offered to retail investors. In this context, updated KID templates will be developed and made available by European supervisory authorities.
• Client journey: investment advisers shall now recommend financial products that are cost-effective and suitable to the retail investors’ financial situation, needs and objectives. However, when recommending diversified, non-complex and cost-efficient products, investment advisers do no longer need to assess the client’s investment knowledge and experience as part of the suitability assessment. 
• Strengthened obligations on inducements: advisers will be subject to stricter rules to ensure that any inducement confers a tangible benefit for their client and that the inducement cost is published clearly and separately from other fees and commissions borne by the client.
• Extended access to professional client category: The professional client criteria have been updated. Under the new framework, more experienced investors who fulfil two out of three criteria will be able to opt for the professional clients’ status, granting them access to additional financial products.
• Actions to improve financial literacy and safeguards regarding “finfluencers”: the RIS package encourages Member States to provide appropriate financial literacy materials while highlighting the risks associated with financial influencers (“finfluencers”).

Timing and next steps

EU Council expects that the technical work on the RIS Package will be finalised at the beginning of 2026. After publication in the EU Official Journal, Member States will have a 24-month period for transposition into national law. The new rules will start applying 30 months after publication, except for the new rules under PRIIPS, which will start applying 18 months after publication.