In June 2025, EFPA administered an ad-hoc survey among EFPA-certified financial advisors across Europe. The sample comprises qualified professionals who actively engage in retail financial advisory services. The survey seeks to elucidate patterns in how retail investors seek financial advice and select investment solutions. It has been developed as an evidence-based response to the European Securities and Markets Authority’s (ESMA) Call for Evidence launched in May 2025.
The executive summary and key conclusions are provided below.
Executive Summary
This response summarises the key findings of the retail investor survey conducted by EFPA Europe in June 2025. The results, based mainly on responses from financial advisors, reveal significant existing barriers to investment in capital markets, reluctant investor perception of financial products and services, and the influence of inadequate financial education and regulations, particularly on disclosure and customer assessment.
The key topics that emerge include:
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preference for the safety of bank deposits,
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widespread lack of financial literacy,
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mistrust of the advice biased by commercial interests,
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ineffectiveness of certain regulatory documents in improving investor understanding and
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the fear of losing money, which is the most influential factor explaining the reluctance to invest.
Key Reasons Why Savers Do Not Invest in Capital Markets
The survey clearly identifies the barriers that prevent retail savers from investing, opting instead for bank deposits:
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perception of greater security: the main reason (43.9%) is the perception of greater security in bank deposits;
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lack of knowledge: a very significant factor (37.6%) is the lack of knowledge and awareness about investment products;
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preference for liquidity: the preference for liquidity and immediate availability of money is less influential (18.5%) but significant.
Difficulty Understanding Products and Need for Financial Education
There is overwhelming consensus by financial advisors on the lack of understanding among retail investors and the need for better financial education:
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lack of financial education as the main difficulty: 78.7% of respondents say that the main difficulty is the lack of financial education on key concepts, even more than the inherent complexity of some products such as derivatives or structured funds (19%);
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significant obstacle: lack of financial education or investment knowledge is seen as ‘the biggest barrier to investment’ by 59.2% of respondents, with an additional 35.1% considering it ‘a contributing factor, but not the main issue’.
Impact of Past Experiences and Fear of Loss
Negative experiences and the inherent fear of losing money are powerful deterrents.
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Negative experiences discourage: 48.9% of respondents believe that negative experiences strongly discourage future investment.
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Fear of losing money as a dominant factor: when asked about influencing factors such as fear of losing money, mistrust or preference for familiar products, 65.2% identified ‘fear of losing money’ as the most relevant issue.
Commissions and Costs
According to financial advisors, commissions are a relevant factor, but not the main obstacle for retail investors from participating actively in capital markets.
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Moderate influence: about 61.7% of respondents consider that fees and costs to some extent discourage retail investors from participating, but investors consider other factors as well. Only 13.2% see them as a major obstacle to investment.
Concerns About Service Providers and Advice
Mistrust of advice is a critical concern.
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Biased advice: the most prominent concern (62.7%) is that investors feel that the advice they receive is biased by commercial interests.
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Access to advice: 65.2% of respondents consider that the financial education of retail investors is often too poor to correctly understand the information and investment advice offered to them.
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Remuneration schemes: 30.8% suggest that remuneration schemes by financial institutions should support access to financial advice rather than sales of products.
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Limited product offering: 41.5% of respondents point out that some products are often not covered (mainly single bonds and ETFs) since they do not offer any remuneration to the distributor/due to a focus on their own products by the financial institution.
Complexity and Clarity of Information
Current information does not help product understanding and, in many cases, even hinders it.
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Excessive/unclear information: 62.3% of respondents say that excessive or unclear information in areas such as costs, risks and product characteristics make investing somewhat difficult for clients, and another 27.4% find that it makes investment very difficult.
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PRIIPs KID: 48.2% of respondents believe that the PRIIP key information document does not help retail investors understand investment products.
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Overwhelming regulatory information: 49.4% believe that regulatory information is overwhelming for customers.
Suitability and Appropriateness Assessment (MiFID II)
Regulatory tools such as suitability reports are highly valued, but the MiFID II suitability test raises concerns about its effectiveness and flexibility.
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Suitability reports: 43.5% consider them to be a good reference to guide counselling and 23.6% see them as essential to protect and personalise the investment. However, 33% think that they do not provide real value to the customer.
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Suitability assessment: the suitability test is well regarded by respondents. For 60.2%, “it helps investors to think before they invest”, and 44.4% consider that it is useful for advisors in their work. However, 29.9% comment that in practice it is not used effectively. Replies are on a non-exclusive basis.
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Appropriateness test: the survey results reflect a critical perception of the appropriateness test. 42.2% consider that more flexibility is needed in the process of assessing client knowledge and experience, and 22.9% consider that it takes too much time and discourages retail investors. However, 34.8% consider that “it is a useful tool and should be maintained”.
Factors Influencing Young Investors and Cryptocurrencies
The desire for quick returns is the main driver for investing in speculative assets such as cryptocurrencies among young people.
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Desire for quick returns: 62.3% of respondents attribute young people’s investment in cryptocurrencies to the desire for profitability in the shortest time possible.
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Exposure to marketing: high exposure to information and marketing about cryptocurrencies is also a significant factor (32%).
Sustainability Preferences
Sustainability is not yet a predominant concern among retail investors.
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General lack of knowledge: almost half (48%) of respondents indicate that retail investors ‘do not know about it and have no opinion’ on sustainability preferences. Only 30.9% show interest and concern.
Key Conclusions
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Financial education is essential: lack of knowledge is the most frequently cited barrier to investment, and better financial education is seen as the key solution.
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Fear of loss and search for security: fear of losing money and the perceived security of bank deposits are the main drivers of reluctance to invest.
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Distrust of advised sales: retail investors perceive the advice they get to be biased by commercial interests, which undermines trust and willingness to invest. The remuneration structure of financial institutions influences product offerings.
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Ineffectiveness of current regulatory information: documents such as PRIIPs KIDs and regulatory information in general are perceived as overwhelming and unhelpful for retail investor understanding. Information on costs and risks is unclear in the opinion of respondents.
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Regulation and flexibility: while the suitability test is considered useful, there is a perceived need for greater flexibility in assessing client knowledge and ensuring that these assessments do not discourage investment.
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Driving factors for young investors: the desire for quick gains and exposure to marketing (and Finfluencers) drive investment in cryptocurrencies more than the mere ability to take risks.
Summary of Key Recommendations
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Expand Financial Education Programmes: introduce accessible and comprehensible initiatives to explain basic investment principles, highlight the benefits of capital markets, and clarify associated risks.
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Improve Transparency and Strengthen Trust: distinguish clearly between sales and advisory services; revise remuneration models to reflect impartiality; emphasize advisors’ duty to act in the client’s best interest; promote awareness of professional financial advice.
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Simplify Investor Information: enhance clarity and accessibility of marketing and disclosure documents to improve investor understanding and reduce confusion.
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Enhance Communication on Risk and Returns: strengthen messaging on investment risks and realistic performance expectations, especially for younger investors drawn to high-risk products.
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Simplify Regulatory Procedures: refine suitability assessments and streamline regulatory requirements to encourage wider participation in capital markets; reinforce trust through clear frameworks and high standards for advisor qualifications.