The retail investment boom observed during the pandemic has leveled off slightly in recent times, and so has trading activity. The new EU retail investor strategy foresees an inducement ban on non-advised transactions and a parallel regulatory offensive foresees the ban of payment for order flows.
In this series of articles, our industry experts share insights, lessons from case studies, and cutting-edge approaches to help banks and brokers in future-proofing their investment offerings and revenue models against these challenges.
Are business models at a tipping point? Our recent Retail Investment Study examines the shifts in retail investor behavior, emerging trends, and the impact of regulatory changes on investment providers for the European market.
What are the legal and commercial implications for investment providers?
In May 2023, the EU Commission published its retail investment strategy. No full ban on kickbacks and inducements, but there will be impact: Commission ban on the sale of investment products if no advice is given.
Max Biesenbach, Simon Kucher partner, breaks down the legal and commercial implications, offering best practices for investment providers.
At retail banks, inducements account for 30-50% of investments revenues
Share of revenue streams in retail investments at universal banks
50-70% of funds transaction volume in advised propositions is non-advised. For this non-advised share, retail banks won't receive inducements
Share of non-advised funds transaction volume in advised portfolios
We have a deep understanding of the diverse needs among different customer segments and optimize our FS clients’ offering landscapes accordingly
We build holistic wealth management apps and provide end-to-end support in developing hybrid advice solutions, from proposition design through UX design to revenue model development
Our team creates future-proof revenue models (incl. inducement-free monetization models) to adapt to regulatory and competitive pressures
We help deepen customer relationships and achieve superior cross- and up-selling rates via smart loyalty schemes and incentive models
We develop marketing strategies and strategic and operational KPIs for our clients. We then apply growth hacking methodologies to boost performance of certain marketing channels or activities
The retail investment market is undergoing a transformation. Banks and brokers in the European market need to act fast to protect their profitable growth.
With our industry experts and hands-on approach, we will help your business achieve sustainable growth in today’s challenging market.
