By Timo Toenges, Head of the Digital Wealth business for EMEA

Retail investor participation remains low, despite a promising 11% increase in investors since 2022, as highlighted in our People & Money Survey. This growth has been largely driven by the rise of digital platforms offering accessible and easy-to-understand investment solutions, empowering millions of European savers to start investing.

While many of these new investors begin their journey through self-directed investing, they often encounter barriers as they seek to deepen their investments. Europe’s current regulatory framework for investment product distribution is barbelled—offering either full financial advice or execution-only services, with little in between. As a result, many individuals fall through the cracks: overwhelmed by the complexity of financial products or deterred by high upfront advice costs.

This highlights a growing need for accessible and trustworthy financial guidance. Simplified advice emerges as a compelling bridge—offering a middle ground between full-service advice and self-directed investing. With digital innovation as a key enabler, there is a unique opportunity to scale this model and better guide investors on their wealth journey.

Simplified advice is streamlined, targeted advice that helps individuals make decisions on specific financial needs— saving for retirement or building an emergency fund. Unlike holistic financial planning, it focuses on a single goal and a limited range of non-complex products making investing more digestible and cost-effective.

Simplified advice could benefit investors without the need for extensive analysis and detailed recommendations typical of full advice, reducing the scope of the current suitability assessment. By lowering barriers to entry, simplified advice can democratise access to targeted insights and empower more citizens to take control of their financial futures.

Despite the opportunity, hurdles remain. Complex financial products and regulatory disclosures can deter even motivated individuals. Low financial literacy and limited trust in financial institutions further undermine engagement. Many digital experiences are fragmented, unintuitive, and lack personalisation.

Therefore, to succeed, a simplified advice proposition must be built digitally around the individual investor’s needs. A successful solution would include:

•  A user-centred design: interfaces should be intuitive, mobile-friendly, and plain-spoken. Visual tools like sliders and progress bars can help users understand trade-offs and outcomes.
• Modular advice journeys: rather than overwhelming users with lengthy forms, advice should be broken into bite-sized steps. For example, “help me invest €5,000 for 5 years” becomes a guided journey with clear milestones.
• Smart onboarding: “nudges” and dynamic questioning can tailor the experience in real time, making it feel personal and relevant.
• Embedded compliance: suitability checks, disclosures, and audit trails must be seamlessly integrated into the user flow—ensuring regulatory alignment without disrupting the experience.

Trust is earned through transparency and support. Clear, upfront fee structures and realistic projections help investors feel in control. Offering human fallback options—chat, phone, or in-branch—can reassure individuals who need extra guidance. Ongoing nudges, reminders, and progress tracking can keep users engaged and motivated over time.

Several platforms across the EU are already exploring this opportunity. Most FinTechs offer easy to use investing journeys based on users’ goals. Meanwhile, traditional banks are piloting digital tools that blend digital advice with human support—extending reach to a broader audience.

To fully unlock these opportunities and empower retail investors, simplified advice should be recognised in regulation. The MiFID framework should introduce this concept, accompanied by proportionate requirements that reflect its limited scope. Information and advice rules should prioritise clarity, relevance, and delivery format—especially for digital channels. Equally important is reforming the current suitability test, which assumes investors have a single, uniform risk appetite. Therefore, overlooking the reality that different goals—such as emergency savings versus retirement—carry different risk tolerances. This one-size-fits-all approach often leads to overly cautious choices, particularly as many struggle to grasp the risk-return trade-off over long investment horizons. The Retail Investment Strategy now under negotiation offers a unique opportunity to adapt the regulatory framework and support the roll out of simplified advice propositions.

Simplified advice, delivered through well-designed digital propositions within a clear regulatory framework, has the potential to unlock a new wave of retail investors across the EU. But success will require collaboration—between regulators, fintech innovators, and banking institutions—to ensure solutions are compliant, scalable, and genuinely helpful to those they aim to serve.

As the regulatory debate unfolds, our October edition of the People & Money Survey may provide fresh data on retail investor trends and behaviour to inform these discussions, so stay tuned for its release.

This document is marketing material.

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