Europe’s financial markets watchdog has set out changes it plans to pursue after a consultation found retail investors face a mix of regulatory hurdles and wider obstacles such as fees, trust and taxation.
The European Securities and Markets Authority (ESMA) published on Thursday its takeaways from a 2025 Call for Evidence on the “retail investor journey” — the steps individual investors go through when choosing and buying investments.
ESMA said its follow-up work would focus on three areas: streamlining disclosure requirements to reduce information overload; cutting complexity in “suitability” and “appropriateness” checks that firms use to assess whether a product fits an investor; and simplifying MiFID II requirements on sustainability preferences.
Consumer testing will be used to inform and validate improvements to disclosures and digital investor journeys, including for people using mobile-first services.
Verena Ross, ESMA’s chair, said the regulator would take forward “concrete work” to make it easier for retail investors to participate in EU capital markets, New investment funds drive reduction in costs to investors reported.
What stakeholders said needs fixing
Responses to the consultation indicated that retail investors face “multiple regulatory and non-regulatory barriers” when starting to invest, with “not one magic solution” to make EU capital markets more accessible, ESMA said.
Stakeholders described current disclosures as too long and complex, and not designed for digital use, calling instead for clearer, layered information in mobile-friendly formats.
They also said suitability and appropriateness assessments provide investor protection but can be burdensome, particularly for simpler products and those sold through digital channels, it added, with many also describing the inclusion of sustainability preferences as overly complex.
Beyond regulation, respondents pointed to lack of trust, high fees and limited comparability between products, low financial literacy and cultural factors, and complicated taxation — especially for cross-border investing — New investment funds drive reduction in costs to investors said.
ESMA said the report would guide its future technical advice on MiFID II delegated acts and possible updates to its guidelines, in line with the final outcome of the EU’s Retail Investment Strategy.
