Background
On 18 December 2025, the European Council and the European Parliament reached a political agreement on the long-awaited Retail Investment Strategy (RIS) package to empower and protect consumers while fostering trust and competitiveness. The system aims to modernise and align the investor-protection rules across sectors, including the Market in Financial Instruments Directive (MiFID), the Undertakings for Collective Investments in Transferable Securities Directive (UCITSD), the Alternative Investment Fund Managers (AIFM) directive (AIFMD), the Insurance Distribution Directive (IDD), Directive 2009/138/EC on the taking-up and pursuit of the business of insurance and reinsurance (Solvency II) and the packaged retail and insurance-based investment products (PRIIPs) Regulation, while also contributing to the Savings and Investments Union (SIU) by broadening efficient investment and financing options.
This publication provides an overview of the key outcomes for the investment funds industry introduced in the final RIS package.
Key outcomes
- Value for money: the RIS introduces a new "value for money" concept, requiring manufacturers and distributors to (i) identify and quantify all costs and charges borne by investors in relation to the investment products they advise and (ii) ensure costs linked to the products they intend to sell are justified and proportionate. This involves a pricing process using peer group benchmarking with “certain level of cross‑border scope” (most probably not EU‑wide but including a limited number of Member States where comparable products are distributed) under MiFID, UCITS and AIFMD, and supervisory benchmarks under IDD.
- PRIIPs: the RIS revises requirements under the PRIIPs Regulation with an updated, standardised Key Information Document (KID), improving visibility of costs, risk and expected returns. KIDs are required to be machine‑readable 30 months after entry into force of the revised PRIIPs rules. A voluntary product personalisation tool has also been retained, with an online comparator supported by a joint political statement at technical level, subject to feasibility and cost assessment.
- Client journey: the initially proposed "best interest test" was deleted, but advisers must still recommend products suitable for a retail investor's needs, objectives, and financial situation. However, the requirement to assess a client's investment knowledge and experience is waived when advisers provide recommendations to consumers on diversified, non-complex, and cost-efficient products. The mandate for standardised risk warnings at Level 2 has been dropped; firms will design their own warnings under MiFID’s appropriateness framework.
- Inducements: the package also strengthens inducement rules, requiring firms and advisers to demonstrate a "tangible benefit" for the client and to disclose the inducement cost clearly and separately from other fees and commissions. Member States will have the ability to introduce an inducement ban under MiFID. The overarching obligation to act honestly, fairly and professionally in the client’s best interests is reinforced.
- Financial literacy: The package further promotes financial literacy and sets safeguards against misleading marketing by so-called "finfluencers".
- Client categorisation: access to the professional client category is extended by updating the eligibility criteria. More retail investors who meet two out of three criteria[1] can now opt for professional client status, granting them access to a broader range of financial products. Finally, certain managers, directors, subject to a fit and proper assessment and AIFM employees with relevant experience will be treated as professional clients.
What’s next?
Technical work to finalise the texts resumed on 19 January 2026. Subject to publication in the Official Journal – expected by the end of H1 2026 – Member States will have 24 months to implement the RIS package, which will apply 30 months after its publication in the Official Journal of the EU, making end‑2028 the earliest general application date. An exception applies to the amendments to the PRIIPs Regulation, which are intended to apply 18 months after its publication in the Official Journal of the EU and could therefore take effect by the end of 2027.
For any questions, please feel free to contact our investment funds experts, Julia Bruzzese, Aurélien Hollard, Benjamin Bada or Julien Robert and our regulatory team experts, Aurélia Viémont, Sarah Hantscher, Mélanie Poirrier or Délia Nesbitt.
[1] Between (i) one of three alternative criteria for transaction frequency: 15 significant transactions annually over the last three years; 30 transactions in the past year; or 10 transactions of at least €30,000 in unlisted companies in the last five years (in existing legislation this criterion currently stipulates 10 transactions per quarter over the previous four quarters); (ii) the size of their portfolio has exceeded €250,000 on average over the last three years (currently €500,000 at the moment of their request for exemption); or (iii) they have worked and carried out related activities in the financial sector for at least one year or, in a newly added alternative criterion, can provide proof of education or training in these activities and an ability to evaluate risk (currently, only working experience counts). However, the training and education alternative criterion may not be combined with the portfolio criterion to qualify an investor for an exemption.
