Better Finance slams ‘inadequate’ work from EU on online tools
European investor lobby group Better Finance has urged the European Commission to develop an ‘action plan’ to help citizens with financial matters.
Presenting its sixth annual research study on pension savings earlier this month, Guillaume Prache, head of the consumer lobby, called for the Commission’s Consumer Financial Services Action Plan to be extended beyond its existing “non-binding key principles for comparison tools”.
The plan referred to “a lack of objective and credible information about available financial products”, while last year the Commission also mentioned the need to improve the quality of comparison websites and pledged specific action.
However, a subsequent report from Deloitte Luxembourg on the project’s progress, released in April, did little more than repeat its previous position. The “study on the distribution systems of retail investment products” restated that investors faced huge challenges when collecting information, comparing data, or getting independent advice.
The report added: “Recent EU legislation (in particular the MiFID II, PRIIPs and insurance distribution directives) should improve the functioning of the markets for retail investors.”
Prache argued that progress so far had been inadequate, and called for citizens to be supplied with comparison data when making personal decisions related to their choice of pension options.
Better Finance suggested other improvements to the EU pensions landscape included:
- disclosure of past performance for all long-term and retirement savings products;
- additional measures for European supervisors’ reporting “on the cost and past performance of the main categories of retail investment, insurance and pension products”; and
- ending “biased advice at the point of sale”.
The near-500-page research volume (Pension Savings 2018) again criticised low returns from investment products as “all too often dramatically underperforming capital markets”.
The lobby group also warned that citizens saving “more and for longer periods” would still not address the issue of inadequate future pensions.
Better Finance’s research has previously been criticised by members of PensionsEurope for “comparing apples and pairs” and for “substantial discrepancies and wrong interpretations” when analysing returns net of costs.