EU Retail Investment Strategy: Provisional Deal on Value-for-Money, Inducements, and Retail Disclosures

What operational and compliance changes should EU investment firms, insurers, and intermediaries plan for after the 18 December 2025 provisional political agreement between the European Parliament and the Council on the Retail Investment Strategy (RIS) package, covering retail advice and suitability, “value for money” checks, inducement controls, third‑party marketing (including financial influencers), and PRIIPs key information document disclosures?

The 18 December 2025 deal is a provisional trilogue agreement. It requires formal approval by the European Parliament and the Council before the amending directive and the amending PRIIPs regulation are adopted and published. The Council has indicated that technical work will continue to finalise the legal texts in early 2026 and that key compliance dates will run from Official Journal publication, with staged application periods.

In this context, “retail clients” refers to non-professional customers under MiFID II and comparable customer categories under insurance distribution rules. “Inducements” refers to fees, commissions, or monetary or non‑monetary benefits received in connection with an investment service. “Finfluencers” refers to third parties paid or incentivised to promote investment products through social media. “KID” refers to the PRIIPs key information document.

Status and timing

The package takes the form of targeted amendments to MiFID II, the Insurance Distribution Directive, UCITS, AIFMD, and Solvency II, plus an amendment to the PRIIPs Regulation.

The Council has described a phased timeline: member states transpose the directive amendments 24 months after publication; the general application date is 30 months after publication; PRIIPs changes apply 18 months after publication.

Until the package is adopted and applicable, existing EU and national rules continue to apply. Press release summaries are not the final legal text; firms will need to review the adopted acts and the related supervisory templates once available.

Advice and suitability

Negotiators agreed that financial and insurance advisers must recommend products and services that are suitable for the client’s needs. Suitability is assessed using proportionate, necessary information, including the client’s knowledge and experience, financial situation, ability to bear full or partial losses, investment needs and objectives, and risk tolerance.

The Council text also signals a simplified suitability route for recommendations limited to diversified, non‑complex, cost‑efficient instruments. In that case, advisers would no longer need to assess the client’s investment knowledge and experience as part of the suitability assessment.

Value for money and product comparison

A central change is a “value for money” gate at product design and distribution. The Council text states that retail investment firms will be required to identify and quantify all costs and charges borne by investors and assess whether total costs and charges are justified and proportionate. Where costs and charges are not justified and proportionate, products should not be approved for sale to retail investors.

To support supervisory scrutiny and product comparison, the Parliament press release states that ESMA and EIOPA are expected to develop supervisory benchmarks, and that investment firms would assess their products against peer groups with a representative number of similar instruments. The Council text also refers to agreed standards for peer groupings and supervisory benchmarks, including a period where national supervisory benchmarks may be used for insurance-based investment products. Retail clients should also be able to compare costs, charges, performance, and non‑financial benefits across products.

The Commission press release also refers to standardised cost terminology, a yearly summary of portfolio performance for retail clients, and a feasibility study for a pan‑European tool that would support product comparison.

Inducements and conflicts of interest

The deal strengthens rules on inducements to reduce conflicts of interest in advice and distribution. The Parliament press release describes a new inducement test aimed at client best interests and clearer separation of inducements from other fees.

The Council press release states that, where inducements are permitted, firms and advisers must act honestly, fairly, and professionally in the client’s best interests, the inducement must deliver a tangible client benefit, and the inducement cost must be disclosed clearly and separately from other charges. Member states remain free to introduce national inducement bans.

Marketing communications and finfluencers

The package places increased weight on retail financial education measures at member state level and on controls for online marketing and promotion.

The Commission press release states that financial intermediaries are responsible for marketing communications, including communications disseminated via social media, celebrities, or other paid third parties.

The Parliament press release states that, where firms use finfluencers to promote financial products or contracts, firms should have a written agreement with the finfluencer, hold the finfluencer’s contact details, and exercise control over the finfluencer’s promotional activity.

PRIIPs KIDs and disclosure updates

Negotiators agreed changes to the PRIIPs KID. The Parliament press release states that the KID should provide forward‑looking performance scenarios based on realistic data and plausible assumptions.

The Council press release states that updated KID templates will be developed by the relevant European supervisory authorities and that KID information on costs, risk, and expected returns will be made more visible and accessible. It also states that, 30 months after entry into force of the new PRIIPs rules, KID information will have to be provided in a machine‑readable format to support comparison.

Professional client opt‑up

The Council press release indicates changes to the criteria for retail investors to be treated as professional clients, with two out of three criteria required:

• Transaction activity: 15 significant transactions over the last three years, 30 transactions over the previous year, or 10 transactions over €30,000 in unlisted companies over the last five years.

• Portfolio size: average portfolio value above €250,000 over the last three years.

• Experience or training: at least one year of relevant work in the financial sector, or proof of education or training and an ability to evaluate risk. The training/education alternative may not be combined with the portfolio criterion.

The Council text also indicates that certain managers and directors of financial firms subject to fit‑and‑proper assessment, and certain AIFM employees with relevant fund knowledge and experience, will be treated as professional clients.

Implementation planning

Firms distributing products to EU retail clients should map the package to product design, pricing, cost/charge data, disclosures, advice workflows, inducement policies, and third‑party marketing arrangements. This includes assessing reliance on peer‑group comparisons and supervisory benchmarks for “value for money” and revisiting contracts and controls used for influencer-led promotion.

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Our team at Prokopiev Law Group advises on EU retail investment and distribution rules, including readiness planning for the RIS package across investment, insurance, and digital channels. Contact us to discuss scoping and implementation planning. Examples include: MiCA, CASP licensing, token structuring, securities analysis, AML/KYC, sanctions compliance, financial promotions, stablecoins, staking, DeFi, RWAs, custody.

The information provided is not legal, tax, investment, or accounting advice and should not be used as such. It is for discussion purposes only. Seek guidance from your own legal counsel and advisors on any matters. The views presented are those of the author and not any other individual or organization. Some parts of the text may be automatically generated. The author of this material makes no guarantees or warranties about the accuracy or completeness of the information.