Europe’s fund industry is making a last-minute attempt to derail new EU rules on investment costs and sales commissions. Investor advocacy group Better Finance has sharply criticized the move. In a notable split with asset managers, European insurers are backing the legislation.
The European Parliament votes Thursday on the Retail Investment Strategy (RIS), a package designed to strengthen protections for retail investors. After more than three years of negotiations, fund industry association Efama is urging lawmakers to reject the agreement. Insurance Europe, the industry group representing insurers, wants it approved.
“Efama believes the current RIS text is not fit for purpose and should be rejected on 12 November,” director general Tanguy van de Werve wrote to Eero Heinäluoma, a Finnish Social Democrat in the European Parliament. Investment Officer has reviewed the email, which was also sent to other members of the Parliament’s economic and monetary affairs committee.
The intervention has drawn criticism in Brussels. “Highly questionable. First they lobby like hell, then they’re unhappy with the outcome,” said a senior expert who has followed EU financial regulation for more than two decades.
Better Finance was equally critical. Its response carried the headline: “First Water It Down, Then Vote It Down? Enough is Enough.”
Aleksandra Mączyńska, the investor group’s managing director, accused the fund industry of turning against a compromise it had helped shape.
“The industry resisted a ban on inducements, presenting value for money as a better alternative,” she said. She criticized subsequent calls to reject an agreement that still permits commission-based distribution.
The compromise preserves sales commissions but imposes tighter conditions. Financial firms must demonstrate that their investment products offer value for money and that commission payments provide tangible benefits to clients.
Insurers back deal
European insurers, by contrast, support the agreement.
“Insurance Europe welcomes the progress achieved in the RIS negotiations and supports taking the agreement forward,” William Vidonja, the association’s head of conduct of business, told Investment Officer.
Insurers distribute investment-linked policies that often include funds managed by asset management companies. Such products are particularly popular in France, where nearly 42 percent of households held a life insurance policy, known as assurance-vie, in early 2024. Almost 20 percent held policies allowing investment in funds without a capital guarantee, according to French statistics agency Insee.
Insurance Europe welcomes provisions allowing insurance coverage and guarantees to be considered when assessing product costs. The agreement also preserves commission-based distribution.
Vidonja explained that underlying investment funds would undergo their own cost assessments, while insurers would have to demonstrate that the overall policy, including insurance coverage, guarantees and distribution costs, provides value for money.
Tighter cost rules
Under the proposed rules, fund providers would have to compare their charges with those of similar products. Supervisors would receive benchmarks to help assess whether costs are reasonable, while sales commissions would have to be disclosed separately.
Efama argues that the package risks duplicating existing requirements, increasing compliance costs and creating new barriers to cross-border fund distribution. It also objects to the amount of detail left to implementing rules, saying firms cannot yet assess the legislation’s full impact.
The association further warns that rapid advances in artificial intelligence could leave parts of the framework outdated before they take effect.
An Efama spokesperson declined to elaborate on the email, referring instead to a statement on Linkedin.
The dispute over commissions dates back to the European Commission’s original proposals in May 2023. Stéphanie Yon-Courtin, the French liberal lawmaker steering the legislation through Parliament, opposed a ban on commissions from the outset.
Dutch precedent
The Netherlands introduced a ban on third-party commissions for retail investment services in 2014. The United Kingdom has comparable restrictions. Under these systems, investment advisers and wealth managers generally cannot receive commissions from fund providers and must instead charge clients directly.
The European Parliament and EU member states reached a provisional agreement in December 2025. If lawmakers endorse it Thursday, only formal approval by the Council of the European Union would remain. The main changes are expected to take effect around mid-2029.
Parliamentary approval remains uncertain. The Social Democrats, Greens and the Left, together holding 233 seats, are expected to support the agreement. Liberal and right-wing groups, with a combined 274 seats, appear likely to oppose it.
That could leave the center-right European People’s Party, Parliament’s largest group with 184 seats, holding the deciding votes. Its position remains unclear.
