EU Retail Investment Strategy: The 2026 Compromise on Value for Money, Inducements, Advice, Marketing and PRIIPs

Summary

• The RIS package was not adopted law as of 2026-08-12. ECON approved the agreed texts on 2026-06-23, and 2026-11-11 was listed as an indicative plenary date. Current MiFID II, IDD, UCITS, AIFMD, Solvency II and PRIIPs law therefore continued to control.
• The proposed directive uses a 24/30-month timetable. It would enter into force on the twentieth day after Official Journal publication. Member States would have 24 months from entry into force to adopt and publish transposing measures and would apply those measures from 30 months after entry into force. No fixed calendar compliance date exists before adoption and publication.
• The proposed PRIIPs regulation generally applies after 30 months, with limited immediate amendments. It would enter into force on the twentieth day after publication and generally apply 30 months later. Specified amendments to exclusions, the relationship with the Prospectus Regulation, and the PRIP definition’s make-whole-clause treatment would apply from entry into force.
• MiFID value for money is a PRIP-specific layer within broader product governance. Manufacturers and distributors of MiFID financial instruments generally remain subject to product-approval and target-market controls, but the compromise’s peer-group value-for-money assessment applies only where the instrument is a PRIP under PRIIPs Article 4(1).
• UCITS and AIFMD would combine undue-cost controls with retail value-for-money testing. Managers would identify and prevent undue costs across the relevant fund perimeter, conduct peer-group value-for-money assessments for funds made available to retail investors, reimburse undue costs, document remediation, and cease making a fund available to retail investors where value for money cannot be ensured after remediation.
• The IDD model remains manufacturer-led. An IBIP manufacturer would perform the principal product-level value-for-money assessment. A distributor of a product it did not manufacture would identify additional distribution costs, verify target-market consistency and return relevant findings to the manufacturer. EIOPA would develop Union supervisory benchmarks, with constrained scope for national benchmarks. Passing a benchmark would not establish value for money by itself.
• The compromise does not impose a general EU-wide inducement ban. It strengthens permitted-inducement conditions through transparent calculation, tangible client or customer benefit, proportionality, restrictions on sales accelerators, separate disclosure and ongoing evidence. Portfolio-management restrictions remain, the IDD test includes a recovery mechanism, and Member-State stricter rules remain material.
• Advice and distribution workflows require targeted—not wholesale—simplification. Suitability and appropriateness assessments would occur in good time before the relevant service or contract. Restricted advice for qualifying diversified, non-complex and cost-efficient products dispenses only with knowledge-and-experience and portfolio-composition information. Switching requires a cost-benefit analysis.
• Competence, classification and cross-border reporting will require new data controls. MiFID advisers and IDD distribution personnel face annual training requirements; professional-client opt-up criteria change materially; annual cross-border reporting is triggered at more than 50 MiFID clients and more than 500 IDD customers.
• Disclosure and digital-delivery changes are substantial. The compromise expands cost and inducement disclosures, introduces annual retail statements, revises the PRIIPs KID through a “Product at a glance” dashboard and digital layering, and requires machine-readable ESAP submissions. Marketing governance would include written finfluencer agreements, annual management-body reporting and enhanced record retention.

Legislative status and commencement

Conclusion

Neither compromise text was binding as of 2026-08-12. Firms should use the texts for structured readiness planning while continuing to comply with existing EU and national law.

Rule

Under Article 294 TFEU, an ordinary-legislative-procedure measure has not been adopted merely because negotiators have reached a provisional agreement or a parliamentary committee has approved the agreed text. Parliament must adopt its first-reading position, after which Council approval is required for first-reading adoption.

The directive compromise would require national transposition within 24 months of its entry into force and application of the national measures from 30 months after entry into force. The directive itself would enter into force on the twentieth day following Official Journal publication.

The PRIIPs compromise would also enter into force on the twentieth day following publication. It would generally apply 30 months later, except for Article 1, points 1, 2 and 3(a), which would apply from entry into force.

Application

The directive and regulation procedure files both remained at “Awaiting Parliament’s position in 1st reading” on 2026-08-12. ECON’s approval on 2026-06-23 and the Council-side confirmation materially reduce political uncertainty, but they do not create current legal obligations or start the statutory implementation periods.

A firm should therefore maintain two separate control baselines:

1. Current-law baseline: presently binding EU rules and applicable Member-State implementing law.
2. RIS readiness baseline: prototype requirements drawn from ST 9538/26 and ST 9539/26, kept inactive until the relevant legal commencement conditions are met.

For the PRIIPs regulation, activation planning must be two-speed. The specified scope and definition changes would require implementation at entry into force, while the principal KID content, digital-delivery and related operational provisions would generally apply 30 months later.

MiFID investment firms and credit institutions

Conclusion

The MiFID special value-for-money assessment should be scoped by product, not assumed to apply to the firm’s entire financial-instrument inventory.

Rule

Proposed MiFID Article 16-a would retain a general product-approval process for financial instruments manufactured for clients, including target market, objectives and needs, risks, distribution strategy and required knowledge and loss-bearing capacity. The additional value-for-money assessment is expressly attached to instruments falling within PRIIPs Article 4(1)’s PRIP definition.

For those PRIPs, a manufacturer would identify and quantify costs and charges, assess performance and non-financial benefits, and determine whether costs are “justified and proportionate” in view of product characteristics, objectives, target market, strategy and distribution. The assessment must include comparison with a representative peer group and individual cost components.

A distributor of a PRIP manufactured by another entity would identify additional distribution costs and inducements and conduct its own assessment. It may rely on the manufacturer’s assessment only where that assessment includes all distribution costs and inducements; the reliance route is unavailable for products manufactured by entities outside the specified UCITS, AIFMD or MiFID regulatory perimeter.

A product materially distant from peer-group average costs and performance to retail-client detriment would require additional substantiation and, where necessary, remediation. A product could not be approved where value for money could not be ensured at approval, and could not continue to be manufactured, offered or recommended where remediation failed. Falling within the peer range would not itself prove value for money. Management bodies would be accountable for the governance arrangements and related reporting.

Application

The firm should first classify each instrument as:

• a PRIP subject to the proposed special assessment;
• a non-PRIP financial instrument remaining subject to general MiFID product governance;
• a product for which the PRIIPs classification is uncertain; or
• a product manufactured outside the EU-regulated manufacturer perimeter, for which distributor reliance may be unavailable.

This classification should be version-controlled because the proposed PRIIPs amendment changes the PRIP definition by excluding fluctuations attributable solely to a qualifying make-whole clause.

For in-scope PRIPs, the firm should build an evidence file covering costs, charges, inducements, performance, non-financial benefits, target-market attributes, peer-group criteria, comparator sources, outlier analysis, remediation and management-body approval. Peer-group logic should permit adjustments for holding period, risk, investment strategy, distribution strategy, objectives, target market, coupon or yield, sustainability characteristics, and active or passive management.

UCITS management companies and AIFMs

Conclusion

The compromise creates two related but distinct duties: an undue-cost regime and a retail value-for-money regime.

Rule

For UCITS, management companies would prevent undue costs, identify and quantify costs before authorization and throughout the fund’s life cycle, and conduct the value-for-money assessment at fund or share-class level for UCITS made available to retail investors within the specified PRIIPs perimeter. The value assessment would cover costs, charges, performance, non-financial benefits and peer-group comparison.

UCITS managers would assess annually whether undue costs had been charged and reimburse unit-holders “without undue delay.” Where the cost of individual reimbursement exceeded the amount or unit-holders could not be identified, the amount would be returned to the UCITS. Reportable recipients include competent authorities, the depositary and auditors. A UCITS whose value for money could not be ensured after remediation could no longer be made available to retail investors.

The AIFMD amendments follow the same core structure. The undue-cost assessment applies across the relevant AIF perimeter, while the value-for-money assessment is directed to AIFs made available to retail investors. AIFMs would reimburse undue costs and return amounts to the AIF where individual reimbursement was disproportionate or investors could not be identified. Failure to establish value for money after remediation would prevent continued retail availability.

UCITS management companies and AIFMs would keep value-for-money records for five years and, when required by the competent authority, up to seven years. Management bodies would oversee and be accountable for the assessment framework.

Application

Fund managers should separate:

• the fund-level undue-cost universe;
• the retail fund/share-class value-for-money universe;
• costs disclosed but potentially unnecessary for the strategy or regulatory operation;
• costs allocated unfairly among investors or share classes;
• marketing and inducement costs embedded within fund charges; and
• costs requiring reimbursement rather than prospective repricing alone.

The operational design should include investor-identification data, historical holdings, reimbursement calculation, de minimis and proportionality analysis under final national rules, payment or fund-return mechanics, depositary and auditor notification, and evidence that future detriment has been prevented.

Insurance-based investment products

Conclusion

The IDD model places the principal value-for-money responsibility on the manufacturer, supported by distributor information flows and supervisory benchmarks.

Rule

Proposed IDD Article 25 would require the manufacturer’s product-approval process to assess an IBIP’s costs, charges, performance, other benefits and consistency with the target market. The product could not be approved, manufactured, marketed or distributed where the manufacturer could not demonstrate justified and proportionate costs and target-market fit.

Manufacturers would provide distributors with complete product, target-market, cost and value-for-money information. A distributor of an IBIP it did not manufacture would identify and quantify additional distribution costs, assess consistency with the target market, provide relevant findings to the manufacturer, and notify the manufacturer when circumstances could adversely affect the product’s target-market consistency or value.

EIOPA would develop Union supervisory benchmarks for use by competent authorities. National benchmarks could operate subject to specified methodological and transitional conditions. A deviation may trigger supervisory scrutiny, but compliance with a benchmark would not itself establish value for money.

Application

The manufacturer-distributor data exchange should cover:

• product and underlying-option costs;
• distribution costs and inducements;
• performance and relevant assumptions;
• insurance cover, guarantees and other non-financial benefits;
• target-market needs and objectives;
• loss-bearing capacity and required customer knowledge;
• actual distribution outcomes;
• complaints, lapses, surrender behavior and other adverse indicators; and
• material changes requiring immediate escalation.

The insurance methodology should not simply reproduce the MiFID peer-group model. It must account for insurance protection, guarantees, biometrical coverage, policy duration, surrender conditions and other product features that may justify differences from investment-only products.

Cross-sector implementation consequence

As a planning inference, groups operating across securities, funds and insurance should establish a shared data taxonomy but retain separate legal decision engines. A common cost and performance repository is efficient; a single pass/fail value-for-money algorithm is not. The decision logic, comparator methodology, remediation and governance evidence must reflect the applicable sectoral instrument.

Inducements, remuneration and conflicts of interest

Conclusion

The compromise strengthens the evidence required for permitted inducements but does not impose a universal EU ban. Firms need both an EU-level test and a Member-State overlay.

Rule

Under proposed MiFID Article 24a, portfolio managers would remain prohibited from accepting and retaining inducements in connection with portfolio management. Where inducements were otherwise permitted, the payment or retention would have to satisfy criteria relating to transparent calculation, tangible client benefit, proportionality to product value and service level, absence of prohibited volume- or value-based accelerators, and separate identifiability.

The MiFID test would apply on an ongoing basis for continuing inducements. Firms would keep an internal inventory and records of the test, separately disclose the existence, nature and amount of inducements, and provide digital non-advised clients using product filters with an option to identify products for which the firm neither pays nor receives inducements.

The IDD test uses the same principal concepts but adds an appropriate recovery mechanism where applicable. That mechanism addresses early lapse or surrender and cases in which customer interests were harmed by noncompliance with investor-protection requirements.

The compromise does not remove Member States’ ability to maintain or introduce stricter restrictions within the relevant statutory parameters. National inducement bans, return-to-client arrangements, independent-advice rules and insurance remuneration restrictions therefore remain separate legal questions.

Application

A compliant inventory should operate at payment-flow level and record:

• payer and recipient;
• legal entities and jurisdictions;
• product and service;
• client or customer segment;
• payment frequency and calculation method;
• monetary or non-monetary form;
• client benefit said to justify the payment;
• proportionality analysis;
• disclosure location;
• recovery or clawback mechanism where applicable;
• conflicts and remuneration linkage; and
• ongoing reassessment date.

Sales-remuneration testing should cover campaign bonuses, product multipliers, thresholds, retrospective ratchets, league tables and management targets. A remuneration mechanism may create the economic effect of a prohibited accelerator even where the underlying third-party payment is presented as compliant.

Insurance systems should additionally connect inducement recovery to lapse, surrender and conduct-event data. Contractual terms with intermediaries should allocate recovery calculations, notice obligations, set-off rights, payment timing and treatment of downstream remuneration.

Advice, suitability, appropriateness, competence and client classification

Suitability and appropriateness

Conclusion

Systems should enforce the correct advice or distribution pathway and preserve evidence of why that pathway was legally available.

Rule

MiFID suitability and appropriateness assessments would have to occur in good time before execution, reception and transmission, investment advice or portfolio management, as applicable. Firms would explain the assessment’s purpose and warn that inaccurate or incomplete information may impair or prevent the assessment and, for advice, prevent the recommendation.

Full suitability would continue to cover knowledge and experience, financial situation and loss-bearing capacity, portfolio composition where available, investment needs and objectives, sustainability preferences where applicable, and risk tolerance.

For advice restricted to qualifying well-diversified, non-complex and cost-efficient instruments, the firm would not need to obtain information on knowledge and experience or portfolio composition. The remaining suitability elements would still apply. MiFID switching would require analysis of the costs and benefits and communication of whether expected benefits exceed costs.

The IDD approach is parallel: suitability or appropriateness before the customer is bound, explanation and warnings, a restricted-advice route omitting knowledge-and-experience and portfolio-composition information, and a cost-benefit assessment for switching underlying investments.

Application

The client journey should identify one of the following pathways before recommendation or execution:

• full MiFID suitability;
• restricted MiFID advice;
• MiFID appropriateness;
• an applicable execution-only route;
• full IDD suitability;
• restricted IDD advice;
• IDD appropriateness;
• professional-client or eligible-counterparty treatment, where applicable.

The restricted route should remain disabled until qualifying-product criteria are finalized through the adopted Level 1 text and delegated measures. The system should retain the product-eligibility version, customer notice, information collected, information omitted, assessment result, recommendation rationale and any switching analysis.

Professional knowledge and training

MiFID natural persons giving investment advice would have to possess the Annex V knowledge and competence and complete at least 15 hours of professional training and development annually, evidenced by a certificate or equivalent proof under home-state mechanisms.

IDD would require insurance and reinsurance intermediaries and relevant employees to maintain and update their knowledge through regular professional development, including product-specific training for new products or services. Home-state mechanisms would assess at least 15 hours annually, with proportionality based on the products sold, distributor type, role and activity.

Training architecture should therefore map individuals to the exact services and products they handle. A generic annual-hours record is insufficient where it does not demonstrate competence in value for money, inducements, restricted advice, new products, digital distribution, sustainability preferences and applicable national law.

Professional-client classification

The compromise would classify managers and directors of specified financial institutions and collective-investment entities as professional clients where directly involved in the entity’s investment activity. Certain AIFM employees responsible for managing or marketing AIFs would be professional only in relation to investments in those specific AIFs. Natural persons in these categories could request non-professional treatment.

For elective professional treatment of a natural person, the revised criteria would be:

• significant transaction activity of at least 15 transactions per year over the preceding three years, 30 during the preceding year, or 10 direct investments in unlisted companies over the preceding five years of at least EUR 30,000 each;
• an average financial-instrument portfolio exceeding EUR 250,000 over the preceding three years; and
• at least one year of relevant professional or capital-markets experience, or recognized education or training demonstrating relevant understanding and risk-evaluation capacity.

Education or training could not be combined exclusively with the portfolio-size criterion. Legal entities would satisfy the test by meeting at least two of: EUR 10 million balance-sheet total, EUR 20 million net turnover and EUR 1 million own funds.

Classification systems will therefore require multi-year transaction and portfolio histories, documentary evidence of experience or training, legal-entity financial data, controls over permitted criterion combinations, loss-of-protection notices and monitoring of later category changes.

Cross-border reporting

MiFID firms and credit institutions would report annually to the home competent authority where they provide relevant services under the freedom to provide services to more than 50 cross-border clients. Required information includes host states, service scope, client numbers and categories, complaints and marketing methods.

IDD insurance distributors would face annual reporting where they pursue cross-border distribution under the freedom to provide services with more than 500 customers. The report would cover host states, activity scale and scope, product types, customer numbers and complaints.

Groups should not implement a common numerical threshold. The MiFID and IDD triggers, customer definitions and reportable fields must be maintained separately.

Cost disclosures, annual statements, Solvency II and PRIIPs

MiFID disclosures

Conclusion

MiFID disclosure implementation should be based on a governed cost and performance data layer rather than independently constructed document templates.

Rule

Proposed MiFID Article 24b would require pre-contractual disclosure of explicit and implicit service, distribution, advice, manufacturing and management costs, together with inducements. Firms would aggregate the information to show overall cost and cumulative effect on return. Where an instrument had no maturity or recommended holding period, calculations would use one- and five-year periods. Clients would retain a right to an itemized breakdown.

Annual retail statements would vary according to the services provided but could include product and service costs, inducements, payments received, taxes, end-period value and net performance. Inducements would be separately itemized and their cumulative effect on net return disclosed.

Direct annual delivery could be displaced by an online system only where the system qualified as a durable medium, the client consented not to receive the statement, and the firm had evidence that the client accessed the information during the preceding 12 months.

IDD disclosures

IBIP manufacturers would provide a concise personalized annual statement containing costs, charges, inducements and related information. The online-system exception requires consent, easy access to current statements, evidence of access during the preceding 12 months and an online system qualifying as an electronic format. The text does not use the MiFID annual-statement requirement that this specific system qualify as a durable medium.

The compromise also recognizes a limited legacy-data issue for insurance contracts in force on 2023-05-23: where information remains unavailable despite reasonable efforts, the statement may explain the gap and, where possible, provide an estimate, with competent-authority notification.

Solvency II migration

ST 9538/26 would delete Solvency II Articles 183, 184 and 185 as part of the reallocation and redesign of policyholder-information requirements.

This should not be implemented as a simple deletion exercise. As a planning inference, firms should construct a requirement-by-requirement crosswalk between existing Solvency II information, the replacement IDD provisions and any national rules. The crosswalk must identify where the obligation moves, changes owner, changes delivery timing or disappears only after the replacement requirement becomes applicable.

PRIIPs KIDs

Conclusion

The final compromise supports concrete PRIIPs readiness work, but template finalization remains dependent on adoption and the regulatory technical standards.

Rule

The immediate-application amendments would:

• revise exclusions, including an exclusion for qualifying immediate annuities without an accumulation phase;
• clarify that PRIIPs and the Prospectus Regulation both apply where a manufacturer falls within both regimes; and
• revise the PRIP definition to exclude fluctuations attributable only to a qualifying make-whole clause.

The generally deferred amendments would keep the KID as a stand-alone document separate from marketing communications. For multi-option products, a generic KID could be used where accompanied by retail-adapted research and comparison tools, links to underlying information and pre-contractual disclosure of total costs.

The KID would contain a “Product at a glance” dashboard summarizing product type, risk indicator, total costs, recommended holding period and insurance benefits. The compromise uses the formulation that the KID should provide appropriate performance information and, where relevant, the assumptions used. Detailed methodology remains for regulatory technical standards; the final Level 1 text should not be paraphrased as prescribing a specific universal scenario model beyond that wording.

Electronic delivery would become the default unless the retail investor requested paper. Paper would remain available free of charge. The KID could use a layered digital format, with the dashboard in the first layer, while the electronic and paper versions would contain the same substantive information.

The obligation to keep a KID revised would cease where the product was no longer available or open to new subscriptions and could not be purchased on a secondary market. For successive transactions based on prior investor instructions, the KID would be required for the first transaction, followed by a short overview of material changes where the KID had been revised.

The ESAP-related PRIIPs information would be submitted in a data-extractable format and, from 30 months after entry into force, in a machine-readable format. This is an ESAP submission requirement under Article 29a; it should not be conflated with the format in which every retail investor must receive the KID.

The compromise does not itself establish an operational EU-wide comparison tool. It requires the Commission, by 2030 and after implementation of PRIIPs KIDs in ESAP, to prepare a feasibility and impact report and, where appropriate, accompany it with a legislative proposal.

Application

The PRIIPs program should contain separate work packages for:

1. immediate scope and definition changes;
2. dashboard and content redesign;
3. multi-option-product comparison tools;
4. electronic-default and paper-request journeys;
5. layered-format design;
6. closed-product and successive-transaction logic;
7. ESAP data extraction and machine readability; and
8. regulatory technical standards and template finalization.

The common disclosure repository should retain every underlying data element, calculation method, effective date, source and owner. It should generate the MiFID, IDD and PRIIPs outputs without assuming that identical terms or formats will ultimately be prescribed across all three regimes.

Marketing communications, finfluencers and complaints

Conclusion

Third-party digital promotion would become an expressly governed distribution function. Firms need lifecycle controls covering creation, approval, dissemination, monitoring, correction, retention and management-body oversight.

Rule

Under proposed MiFID Article 24c, marketing communications would have to be identifiable as marketing, identify the responsible firm, be fair, clear, not misleading and balanced, and be appropriate for the target market and distribution channel. A manufacturer preparing marketing for a distributor would remain responsible for content and updating, while the distributor would be responsible for target-market-consistent use.

A MiFID firm using a finfluencer would enter into a written agreement defining the nature and scope of the activity. Firms would report annually to the management body on marketing use, strategy, compliance, irregularities and proposed solutions. Marketing records would generally be retained for five years and, if requested by the competent authority, up to seven years. The records would include content, medium, timing, target segment, dissemination jurisdictions and third-party identity and social-media details.

The IDD compromise contains a parallel finfluencer agreement and management-body reporting framework. Insurance undertakings and intermediaries would retain relevant IBIP marketing records for seven years.

MiFID firms and insurance distributors would permit complaints in the language used for the relevant client or customer information, marketing or contractual documents. They would communicate a decision as soon as possible and, in any event, no later than 40 working days after receipt, subject to an exceptional-delay notice.

Application

A central marketing register should include:

• firm-generated and manufacturer-generated material;
• distributor adaptations;
• websites and applications;
• paid search and display advertisements;
• social-media posts, videos and livestreams;
• affiliate and introducer content;
• comparison sites;
• influencer, celebrity and creator promotions;
• personalized prompts and automated campaigns;
• target audience and jurisdiction;
• approval version and expiry date;
• actual dissemination dates and channels;
• corrective action and takedown evidence; and
• related complaints and conversion outcomes.

Finfluencer agreements should address prior approval, mandatory disclosures, permitted and prohibited statements, audience targeting, jurisdiction restrictions, access to analytics, archive obligations, monitoring, correction, takedown, regulatory cooperation, audit rights, subcontracting and termination.

Complaint systems should calculate working days under the relevant national calendar, preserve the complaint language, issue delay notices before the deadline, and link complaint outcomes back to product governance, value for money, advice, inducements and marketing remediation.