Retail investors need coherent and reliable narratives around capital markets. This requires moving away from reductive debates about products and providers. Rather, a comprehensive agenda for retail investors should focus on solutions (and underlying asset classes) to meet specific financial objectives (fully scalable and/or customised). And ultimately, the financial industry must deliver ‘good value for money’. The CMU 2.0 Action Plan alone is not likely to solve long-standing structural problems. Ensuring that retail investors benefit in practice from the same safeguards as professional and institutional investors is essential. Weaknesses in supervision and enforcement could give rise to regulatory arbitrage or market fragmentation, which will be to the detriment of these investors.
This commentary is part of a dedicated series, as a follow-up to the CEPS–ECMI Task Force Report on “Asset Allocation in Europe: Reality vs Expectations” released in April 2020.