The European Commission should make sure that investment saving products across the EU are uniformly regulated, says the ABI. Any new rules should prioritise achieving the best outcomes for consumers as a priority. The ABI has released a Working Document, entitled Packaged Retail Investment Products: New Ways of Thinking, which sets out its initial thoughts.
A hearing into the issue takes place at the European Commission on 22 October 2009. This follows the Commission’s Communication on Packaged Retail Investment Products (PRIPs) released in April 2009. This identified concerns over the lack of a regulatory level playing field for the regulation of retail investment products. The scope of the PRIPs project has yet to be finalised, but it should cover investment savings products, including unit-linked life insurance policies and with-profits funds.
The ABI urges the Commission to:
- put the needs of consumers first when thinking about any new regulatory framework for PRIPs at a European level;
- recognise the importance of increasing consumers’ savings and encouraging a competitive environment between different product types and manufacturers;
- focus on the economic purpose of a product, rather than its legal form – equivalent products should have equivalent regulatory treatment;
- recognise that consumers want, need and deserve a regulatory framework for selling practices that focuses on their needs, treats them fairly, enables them to understand the sales process and ensures that financial advice is not biased by remuneration arrangements with product providers;
Maggie Craig, the ABI’s Director of Life and Savings, said: “The Commission is right to flag up concerns over the different way investment products are regulated across Europe. At the ABI, we are already working to improve the clarity with which providers describe their products to customers, to remove remuneration bias from the advice process and to increase the professionalism of advisers. We call on the Commission to deliver a regulatory framework in Europe that supports us in achieving these goals – this can only benefit consumers across the Single Market.”