Q #1 How important are investor education and financial literacy?
The old-age dependency ratio in the EU continues to increase; Eurostat’s recent figur
Financial literacy is essential for making sound decisions when managing savings. If European citizens do not understand financial concepts such as risk diversification, compound interest and real rate of return, they won’t know where to start or what to ask should they wish to invest their savings. A lack of sufficient financial literacy in most European countries helps explain why the vast majority of households don’t directly invest any of their savings in the capital markets.
EFAMA's Investor Education Platform has now produced an animated brochure titled ‘Investing for a better future – 5 tips to do more with your savings’ to help get people started with investing. It has been translated into several European languages.
With European government no longer able to provide financial security to support citizens in later years, saving for retirement is key. Individuals need to save enough for retirement to ensure adequate income in old age.
EFAMA helps by raising awareness of the importance of saving for retirement and encouraging European authorities to further modernise relevant EU legislation. This includes strengthening competition in the occupational and personal pension markets, and fostering cross-border activities of pension providers and asset managers. Such legislation should seek to create economies of scale, to benefit savers.
EFAMA is a co-initiator of the European Retirement Week.
Building a Capital Markets Union (CMU) serving the needs of European citizens and businesses is as ambitious as it is essential: the effort will enable pensioners and savers to share in the upside of Europe’s economic recovery. In the process, European capital markets also become more efficient and better integrated. This long-term vision is key to financing European innovation and to supporting the transition towards a more sustainable economy.
Increasing retail investors’ participation in capital markets is an essential component for building an effective CMU. EFAMA relentlessly advocates for effective disclosure rules and consumer empowerment.
Asset managers unleash the vast potential of sustainable finance by channelling capital into ESG investments and engaging with investee companies to improve their sustainability profile and foster long-term prosperity.
To strengthen the asset managers' role in financing the green transition, EFAMA contributes to the development and implementation of the EU Sustainable Finance agenda. This includes initiatives to fight greenwashing, increase transparency, improve the flow of ESG data and integrate sustainability in corporate governance.
To remain competitive and at the forefront of innovation, Europe must be open to cross-border flows of knowledge, ideas, capital and investment. The benefit in doing so ultimately accrues to European citizens and businesses.
While Europe rightly strives for high regulatory standards, rules need to be well calibrated, so Europe can partake in global competition on a level playing field. EFAMA's policy work consistently advocates for a dynamic regulatory environment, which enables European financial markets to remain globally competitive.
The old-age dependency ratio in the EU continues to increase; Eurostat’s recent figur
Investor education initiatives are essential to improve financial literacy and empower citizens to make sound decisions when managing their savings. If citizens do not have the basic knowledge to understand financial concepts such as risk diversification, compound interest and real rate of return, they won’t know where to start or what to ask should they wish to invest their savings. A lack of sufficient financial literacy in most European countries helps explain why the vast majority of households don’t directly invest any of their savings in the capital markets.
EFAMA provided high-level comments to the Commission’s consultation on the potential review of the Directive on Distance Marketing of Consumer Financial Services.
We agree with the Commission’s interpretation that the Directive is seen as a “safety net” for financial services not already subject to product-specific legislation. Fund and asset managers are already subject to various, more stringent and detailed sectoral legislations, such as (but not limited to) UCITS, AIFMD and MiFID as well as the (more recent) Cross-Border Fund Distribution Directives.
The European Fund and Asset Management Association (EFAMA) has today published its latest monthly Investment Fund Industry Fact Sheet, which provides net sales data on UCITS, and AIFs sold in July 2021, at European level and by country of fund domiciliation.
Bernard Delbecque, Senior Director for Economics and Research at EFAMA, commented: “Robust net inflows into long-term UCITS continued as investor confidence was buoyed by positive macro-economic data and an accelerating vaccine roll-out in Europe.”
The asset management industry recognises the much-needed adoption of mandatory European sustainability reporting standards under the Corporate Sustainability Reporting Directive (CSRD) proposal. Insufficient availability of meaningful, comparable, reliable, and public Environmental, Social and Governance (ESG) data is a key impediment to realising the full potential of the EU's sustainable finance regulatory framework. Financial market participants' sustainable investments need to be driven by real, verifiable and reported ESG metrics of company's activities and financial risks.
EFAMA published its latest quarterly international statistics, tracking and analysing trends in worldwide regulated open-ended fund assets and flows for Q2 2021.
Tune in on 12 October at 9.00 am CEST to POLITICO Live’s event “Raising the green game in finance: how can Europe deliver?” with the participation of EFAMA's Vice-president Peter Branner from APG Asset Management. He will be joined by
We are thrilled to announce that Manulife Investment Management, an international investment management firm for institutional investors, and Macfarlanes, a top international law firm, have joined EFAMA.
The EFAMA Board approved their respective memberships on 14 September 2021.
Please join us in welcoming them to the EFAMA community!
The signatories share the following views:
• Securitisation is an important element of well-functioning financial markets. Prudently deployed and sensibly regulated, it can:
o act as a bridge between the banks’ financing and the capital markets;
o enable non-banks to diversify funding sources; and
o provide investors with high quality fixed income securities at attractive yields.
EFAMA is supportive of the general objectives of the PRIIP KID Regulation. We are however concerned about the very limited time that product manufacturers will have between the final technical rules (RTS) and essential guidelines being published and the deadline to produce Key Information Documents (KIDs) from 31 December 2016 onwards. Having provided extensive feedback throughout the ongoing Level-2 work, we seriously doubt there will be enough time for market participants to implement the final rules by the end of this year, as originally foreseen by the co-legislators.
EFAMA welcomes the opportunity to provide the views of the asset management industry to this challenging exercise of assessing the impacts of recent regulatory reforms in the area of financial services.
There are a number of general remarks that we would like to make by way of introduction.
Need for consistency and coordination
After having looked extensively at the Level-2 work done by the ESAs, EFAMA1 comes to the unfortunate conclusion that, due to the very technical nature of the underlying methodologies and calculations, there will not be enough time for market participants to fully implement the PRIIP KID by 31 December 2016.
Our corporate members are both subsidiaries of an EEA parent that is a credit institution as per Article 4(1)(1) of the CRR, or stand-alone investment firms as per Article 4(1)(2) of the CRR. Both types of entities risk becoming subject to the Maximum Ratio Rule as asset management companies licensed under either a UCITS or AIFM management company license, or licensed as investment firms under the MiFID regime to provide discretionary portfolio management services on a client-by-client basis.
Discover the 6 reasons why your organisation should become a member of EFAMA.
Our members enjoy significant benefits including the opportunity to shape the industry positions, get first-hand access to regulatory and political intelligence, engage with industry peers and policymakers, and take part in EFAMA events.
Our three membership categories cater to the wide range of organisations that make up and support the investment management industry in Europe.
Keynote speech by European Commissioner Mairead McGuinness at the 27th Investment Management Forum on 18 November 2021.