26 February 2024

BETTER FINANCE supports the FSUG statement on Value for Money in Retail Investments

BETTER FINANCE endorses the FSUG's call for improved 'Value for Money' in retail investments. The focus is on enhancing the effectiveness of packaged retail and insurance-based investment products (PRIIPs) to contribute significantly to investors' financial well-being. The FSUG emphasises the responsibility of product manufacturers to design products that boost investors' financial wealth and urges supervisors to eliminate consistently underperforming products from the market.

Summary of FSUG Opinionon Value for Money (VfM) in Retail Investments

With the ongoing legislative and supervisory works aiming to improve the ‘Value for Money’ (VfM) that retail investors obtain from their packaged retail and insurance-based investment products (PRIIPs), the FSUG wishes to highlight its support for the Commission proposal to strengthen the VfM regime-while acknowledging the urgent need for a clearly constructed and enforceable benchmarking requirements. a)We believe that systematically comparing a product’s mix of costs and performance to an external benchmarkcan greatly contribute to identifying problematic cases, starting with products that are poorly designed that they cannot bring any value to consumers. b)The FSUG also considers appropriate the approach consisting of establishing a benchmark per category of productssharing similar characteristics, which allows tocomparea product to its ‘peers’ on the market. c)We strongly support the proposal to create benchmarksthat will combine indicators on costs and on performance, considering that high costs are only an issue when they come with poor performance.d)The FSUG supports the view that the results of all the steps in the product approval and pricing processes—including comparisons to relevant benchmarks—should be made availableto competent authorities, but also to the general public....

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