EUROPE - The European Fund and Asset Management Association (EFAMA) has set out a blueprint for action on long-term savings and retail product distribution within the EU.

The move highlights what EFAMA considers to be the pressing problems of unsustainable long-term savings systems and volatility in asset flows, with many investors having withdrawn assets prematurely after the market crash, thereby suffering losses through poor timing. It says Europe's long-term savings systems are unsustainable in their current form unless concerted action is taken to strengthen individual contributions across the continent.

The report, Revisiting the landscape of European long-term savings, sets out eight recommendations to improve regulations for long-term savings, retail product distribution, financial education and business practices. Its aim is to achieve greater transparency, increased investor confidence and efficient savings solutions.

The research is based on interviews carried out by McKinsey with 23 CEOs of some of Europe's largest pension funds, investment consultancies and asset management firms.
Recommendations include encouraging European governments to introduce compulsory long-term savings schemes, with employer and industry support.

The report also calls for the creation of a personal retirement plan - the "Officially Certified European Retirement Plan (OCERP)" with consistent certification standards across Europe. It says that all product providers should be given equal access to suitable and efficient OCERPs in order to increase competition.

Jean-Baptiste de Franssu, CEO of Invesco Europe and president of EFAMA, said: "Since the IORP directive, nothing has come into existence to generate pan-European retirement plans. The OCERP would be a simple retirement wrapper which could be transported within the EU like a UCITS, and this framework could very well be a part of the IORP."

De Franssu added: "The real obstacle we are facing is the tax environment - an OCERP should be able to benefit from the best tax regime in each EU country."

In the report, EFAMA addressed three more recommendations to distributors, packaged retail investment product (PRIP) providers, and investors. It calls for the harmonisation of distribution standards of PRIPs across product categories; better quality and transparency of activities at the point of sale; and the promotion of further confidence in UCITS as a trustworthy investment vehicle.

EFAMA will be raising these issues over the next few months with the European Commission - principally Michel Barnier, the commissioner for the single market -- and the European Parliament.

De Franssu says: "It will be a success for us if we hear back from the Commission that it wants to spend more time on retirement issues and retirement products in Europe."