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Investor’s Freedom or Consumer’s Protection?

Graziella Marras Senior Policy Advisor. Investor’s Freedom or Consumer’s Protection?. EFAMA-Land. EFAMA is the representative association for the European investment management industry 24 COUNTRIES: 20 EU Members and Liechtenstein Norway Switzerland Turkey

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Investor’s Freedom or Consumer’s Protection?

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  1. Graziella Marras Senior Policy Advisor Investor’s Freedom orConsumer’s Protection?

  2. EFAMA-Land EFAMA is the representative association for the European investment management industry 24 COUNTRIES: • 20 EU Members and • Liechtenstein • Norway • Switzerland • Turkey + 43 Corporate Members = Investment Management: EUR 16.5 trillion of which EUR 7.9 trillion through over 46 000 investment funds

  3. THE MiFID “REVOLUTION” AND ITS IMPACTON INVESTMENT MANAGEMENT

  4. MiFID Impact on Asset Management andon Distribution of Financial Products MiFID regulates: • Investment firms offering individual portfolio management services • UCITS managers offering individual portfolio management services as additional activity • Distributors of financial products including investment funds (BUT not the distribution of insurance products) MiFID introduced: • Conduct of business rules covering: • conflicts of interest • inducements • best execution • suitability or appropriateness tests

  5. MiFID: What are the key issuesfor the Asset Management Industry? • Lack of consistency in implementation, resulting into higher costs • Lack of level playing field among financial products at the point of sale

  6. MiFID – Is there a silver lining? • If rightly implemented, MiFID could be a significant step towards the realisation of a level playing field among investment products at the point of sale But • Insurance products are not included • Lack of transparency equivalent to funds’ for other products not addressed by MiFID

  7. Beyond MiFID - A true Level Playing Field Among Competing Financial Products For EFAMA, a Level Playing Field means comparable conditions for all competing investment and savings products at the point of sale In 2007 the Commission Green Paper on Retail Financial services finally acknowledged the need for a level playing Field, and the Call for Evidence on Substitute Products opened up the discussion on possible solutions.

  8. Substitute Products and Investor Protection • High levels of disclosure currently available for funds but not for other products • Investors should enjoy the same level of protection (disclosure, suitable advice) regardless of the financial wrapper • MiFID is a great step forward for investor protection, but it is not sufficient

  9. The way forward STILL TO DO: • Other EU Directives must be brought up to MiFID and UCITS standards, and • Correct and harmonized implementation of MiFID must be ensured

  10. INVESTORS, INDEPENDENT ADVISORS AND ASSET MANAGERS CAN ALL BENEFIT FROM A LEVEL PLAYING FIELD

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