Investment services and retail participation in capital markets
Investment services enable investors to access financial instruments and participate in capital markets. Under MiFID II, they cover a defined set of activities, including reception and transmission of orders, execution of orders on behalf of clients, portfolio management, investment advice, and the underwriting and placing of financial instruments.
Firms also distribute a broader range of retail investment products, such as investment funds and insurance-based investment products, generally accompanied by a standardised Key Information Document (KID) under the EU's PRIIPs framework.
For retail investors, accessible distribution, clear information and high standards of conduct and investor protection are essential to informed participation in capital markets. Firms providing advice or portfolio management must assess a client's knowledge, financial situation and objectives through a suitability test, while an appropriateness test applies to other services involving more complex instruments, and product governance rules require manufacturers and distributors to define and monitor a target market for each product.
Investment services play an important role in the EU by connecting European households with capital markets and helping channel savings into productive investment. Trusted and accessible services can encourage households to invest for the long term while supporting the financing needs of the EU economy.
The role of banks in connecting investors to markets
Banks are major providers and distributors of investment products and services to retail clients, typically through branch networks, digital platforms and advisors. Through established customer relationships, they help investors understand their options, access relevant information and, where applicable, receive advice adapted to their objectives and circumstances. Where banks provide independent advice, they must assess a sufficiently broad range of products from different providers and cannot retain certain inducements, while non independent advice allows a narrower product range subject to the disclosure and best interest safeguards that apply to inducements more generally.
Banks often act as both manufacturers and distributors of investment products, for example when structuring their own funds or structured products, which means they carry product governance responsibilities at both stages, defining and monitoring the target market for a product and ensuring it continues to meet that market's needs.
By combining an understanding of their customers' needs with robust product governance, disclosure and distribution processes, banks provide a trusted and regulated gateway to capital markets. They help investors make informed decisions while supporting high standards of investor protection throughout the investment process.
EBF priorities
The following priorities are currently shaping the future of investment services and retail participation in Europe's capital markets.
1. RIS implementation
Following the political agreement reached between the European Parliament and the Council on 18 December 2025, the Retail Investment Strategy will introduce a strengthened framework for inducements, a new value for money assessment for manufacturers and distributors, and enhanced disclosure and marketing rules, while stopping short of the ban on inducements for execution only sales originally proposed by the Commission. Attention now turns to the technical standards that will translate these principles into practice and to national implementation.
The EBF's priority is to ensure this next phase is proportionate and consistent across Member States, so that value for money assessments and inducement safeguards protect investors without disrupting distribution models that already serve most retail clients well, and without creating a de facto ban through the way the tests are calibrated.
2. Simplification of the investor journey
Retail investors today often face lengthy onboarding processes and overlapping disclosure documents before they can start investing. The EBF supports simplifying this journey alongside RIS implementation, including digital by default delivery of disclosures and the Key Information Document, closer alignment between MiFID II and PRIIPs disclosure requirements to remove duplication, and streamlined, proportionate suitability and appropriateness assessments focused on the information genuinely needed to protect investors. A simpler journey, from onboarding through to ongoing reporting, is central to the EU's ambition of bringing more household savings into capital markets.