RIS: The reform that will test the value of the financial intermediaries deliver to clients

SÉRVULO PUBLICATIONS 11 Jun 2026

The progress of the Retail Investment Strategy (RIS) marks a regulatory shift with direct implications for distribution, advice and the way financial intermediaries justify costs, inducements and the value delivered to clients.

Following the political agreement reached between the Council of the European Union and the European Parliament on 18 December 2025, and the Council’s subsequent endorsement of the agreed text in June 2026, the RIS has moved materially closer to adoption. While the consolidated text does not appear to depart in any material respect from the compromise previously reached, it confirms the advance of a reform with potentially structural consequences for financial institutions’ business models — particularly in the areas of inducements, advice and value for money.

The key message for the sector is already clear: adapting to the RIS will not be limited to updating policies, disclosures or documentation. The new framework shifts the focus away from formal compliance alone and towards a more substantive expectation — namely, demonstrating that the products distributed, the advice provided and the costs borne by the client deliver genuine value and are consistent with the client’s best interests.

What is at stake

The RIS is rooted in a diagnosis expressly acknowledged by the EU institutions: retail participation in EU capital markets remains comparatively low; many investors still struggle to access clear, comparable and decision-useful information; and significant concerns persist in relation to conflicts of interest, the growing influence of marketing, and excessive cost structures.

It was against this background that the European Commission presented the RIS legislative package on 24 May 2023, as part of the broader Capital Markets Union / Savings and Investments Union agenda, with the stated objective of placing the interests of retail investors at the centre of the retail investment framework.

Key areas of immediate impact for financial intermediaries

Five areas are likely to require the most immediate attention from the financial sector:

1. Inducements and retrocessions

The RIS does not introduce a blanket ban on inducements. It does, however, significantly tighten the conditions under which such arrangements may continue to be permitted. The clear policy objective is to reduce conflicts of interest in product distribution and to impose a more robust justification for remuneration structures based on third-party payments.

In practical terms, financial intermediaries are likely to need to revisit:

• their remuneration models;
• the way inducements are identified, explained and documented; and
• the robustness of the conflicts of interest policies applicable to their distribution activity.

2. Advice and suitability

The reform also strengthens the advisory framework. The aim is to ensure that recommended products and services genuinely correspond to the client’s needs, taking into account the client’s knowledge and experience, financial situation, ability to bear losses, investment objectives and risk tolerance.

In practice, this is likely to result in increased scrutiny of:

• suitability processes;
• the rationale underpinning recommendations; and
• firms’ ability to demonstrate, in an auditable manner, why a given solution was considered suitable in light of the client’s profile and circumstances.

3. Value for money

One of the central pillars of the RIS is the reinforcement of the value for money principle. The underlying logic is straightforward: investment products and services offered to retail clients must present a cost-benefit relationship that is both justifiable and sustainable.

In this context, the identification and quantification of all costs and charges borne by the investor will become particularly important, as will product comparability in terms of costs, performance and benefits. This may have a direct impact on the way financial intermediaries structure their product offering, determine pricing and assess whether certain products should remain on the market.

4. Investor information, PRIIPs and comparability

The RIS also includes measures aimed at modernising the PRIIPs regime and the Key Information Document (KID), with a view to making investor information more accessible, more comparable and more useful for decision-making purposes.

This will justify a review not only of KIDs and pre-contractual documentation, but also of the consistency between:

• marketing materials;
• cost disclosures; and
• the actual distribution process followed in practice.

5. Digital marketing and finfluencers

The reform also responds to the growing role of digital channels in investment decision-making. The EU legislator has expressly identified the risks associated with social media marketing and newer promotional formats, requiring greater attention to how products are communicated to the market.

For financial intermediaries, this is likely to translate into closer scrutiny of:

• digital campaigns;
• the use of third parties in product promotion; and
• internal approval and monitoring mechanisms for promotional content.

Why it matters to start now

Although the agreement still requires confirmation in plenary by the European Parliament — with an indicative timetable pointing to the September 2026 session — the legislative process is already described by Parliament itself as “close to adoption”. The substance of the reform is now sufficiently clear to justify preparatory work without waiting for the formal end of the legislative process.

For banks, financial companies and other financial intermediaries, this means preparation should not be postponed until the final stage of the legislative cycle. On the contrary, there is a strong case for beginning now with a targeted review of the areas in which the impact is likely to be most direct and operationally significant.

As a matter of prudence, firms should prioritise an assessment of the following:

• inducement models and the basis on which they are justified;
• conflicts of interest policies;
• suitability and advisory processes;
• product governance and value-for-money mechanisms;
• pre-contractual documentation, KIDs and marketing materials; and
• marketing policies, digital channels and the associated internal controls.

A shift in regulatory paradigm

The RIS confirms a broader change in the direction of EU retail investment regulation: the focus is no longer solely on formal compliance, but increasingly on the actual value delivered to the client.

For the financial sector, this shift implies a cross-cutting adaptation exercise affecting distribution models, advisory processes, remuneration structures, product governance and communication channels. The earlier that exercise begins, the more robust firms’ response will be to a reform that, in practical terms, has already begun.

 

 Verónica Fernández | vf@servulo.com