BETTER FINANCE is the only European federation dedicated to protecting and representing the interests of individual investors and financial service users. Can you explain how this mission translates into concrete advocacy actions at the EU level?
At BETTER FINANCE, our mission is to ensure that European financial regulation works for citizens rather than primarily for financial institutions. Translating that mission into practice means combining independent research, policy advocacy and participation in EU decision-making processes to ensure the voice of retail investors is heard.
One key element of our work is direct engagement with EU institutions. We participate in several advisory and stakeholder groups organised by the European Commission and European supervisory authorities. Through these platforms, we provide input on legislative proposals, technical standards and regulatory initiatives affecting investors and financial services users. This ensures that the perspectives of savers, pension participants and small shareholders are represented in policy discussions that might otherwise be dominated by industry stakeholders.
Another important pillar is evidence-based policy research. Our studies examine the real outcomes of financial products for consumers, for example the long-term performance of pension savings products, the cost structures of investment funds, or the risks associated with certain retail investment models. This research allows us to highlight structural issues such as excessive fees, conflicts of interest in financial advice, or misleading marketing practices.
We also contribute to public consultations and legislative debates, including those related to EU initiatives on retail investment, capital markets integration, sustainable finance and digital financial services. Our objective is not simply to criticise existing frameworks but to propose practical solutions: improving disclosure and comparability of investment products, strengthening supervisory enforcement, and ensuring fair access to capital markets.
In addition, we work to empower investors directly. This includes promoting independent financial education, supporting shareholder rights, and advocating for stronger mechanisms for collective redress when investors suffer harm.
Ultimately, our advocacy is guided by a simple principle: Europe’s financial system should serve the real economy and the long-term financial well-being of citizens. When retail investors trust markets and receive fair outcomes, they are more willing to invest, which in turn supports economic growth and innovation across Europe.
The Savings and Investments Union is back on the EU agenda. What gaps have kept previous efforts from reaching SMEs, and what will make this new attempt different?
The idea behind a deeper European capital market, whether under the label of the Capital Markets Union or now the Savings and Investments Union, is fundamentally sound. Europe has abundant household savings, while many innovative companies, particularly SMEs, struggle to access long-term financing. The challenge has been translating this potential into functioning market channels that benefit both investors and businesses.
One key gap has been the limited participation of retail investors in capital markets. European households hold a significant share of their savings in low-yield bank deposits rather than long-term investments. This is partly due to a lack of trust in financial markets and intermediaries. Past experiences with complex or costly financial products have discouraged many savers from investing directly in equities or funds.
Another obstacle has been the fragmentation of European capital markets. Different national tax systems, regulatory frameworks and supervisory practices create barriers for companies seeking cross-border financing and for investors looking to diversify their portfolios across the EU. For SMEs in particular, the cost and administrative burden of accessing public markets often outweigh the benefits.
At BETTER FINANCE we believe a successful Savings and Investments Union must address both sides of the equation: investor confidence and market accessibility.
First, investor protection and transparency must improve. Retail investors are more likely to invest in capital markets if they trust that products are fairly priced, risks are clearly disclosed, and advice is free from conflicts of interest.
Second, SME access to markets must become simpler and more proportionate. Listing requirements, reporting obligations and market infrastructure need to be designed in a way that reduces unnecessary complexity while maintaining investor safeguards.
Third, Europe should invest in financial literacy and investor education. Many citizens remain unfamiliar with long-term investing, equity ownership and diversification.
If these conditions are met, the Savings and Investments Union could finally bridge the gap between European savings and the financing needs of European companies. In that sense, it has the potential not only to strengthen capital markets but also to reconnect citizens with the real economy.
More European companies are now choosing to delist or to list outside the EU. What does this trend mean for the competitiveness of European capital markets, and for mid-sized firms that might otherwise have turned to public markets to grow?
The increasing number of European companies delisting or choosing to list outside the EU is a worrying signal for the long-term competitiveness of Europe’s capital markets. Public markets are not only financing venues, they are also mechanisms for transparency, corporate governance and broad wealth creation. When companies leave these markets, the consequences extend beyond the firms themselves.
For mid-sized companies in particular, public markets traditionally provided a pathway from early growth to international expansion. Listing allowed them to raise capital, diversify their shareholder base and increase visibility. If this pathway becomes less attractive, many firms may instead rely on private funding sources or foreign exchanges.
Several factors explain the trend. One is the relative attractiveness of larger non-EU markets, which often provide deeper liquidity and greater analyst coverage. Another is the perception that European listing frameworks can be complex and costly, especially for smaller companies.
However, addressing this issue should not mean weakening investor protections. At BETTER FINANCE we believe the goal should be smarter regulation rather than deregulation. Public markets function well only when investors trust the integrity and transparency of listed companies.
A more promising approach is to improve market efficiency and investor participation. Europe needs deeper and more liquid capital markets, which in turn requires stronger retail investor engagement. When individual investors actively participate in equity markets, they provide an additional and stable source of capital for companies.
Another important factor is cross-border integration. European markets remain fragmented, which limits liquidity and increases costs for companies and investors alike. Greater harmonisation of market infrastructure, taxation and supervisory practices would make EU markets more competitive globally.
Ultimately, revitalising European public markets requires a balanced strategy: maintaining strong investor protections, simplifying unnecessary administrative burdens, and encouraging broader participation in equity markets. If Europe succeeds in achieving this balance, public markets can once again become an attractive growth platform for mid-sized companies.
Digital platforms and neo-brokers are transforming how retail investors connect with businesses. Are these platforms creating a genuine new funding route for companies, or mainly reshaping secondary trading?
Digital investment platforms and so-called neo-brokers have significantly changed how individuals interact with financial markets. By lowering entry barriers and reducing transaction costs, these platforms have enabled millions of citizens, especially younger investors, to access equity markets more easily than in the past.
However, it is important to distinguish between access to trading and access to financing. Most of the activity facilitated by these platforms takes place in secondary markets, where investors trade existing shares rather than providing new capital to companies. From that perspective, the immediate impact on corporate financing is limited.
That said, these platforms still play an important role in the broader financial ecosystem. Increased retail participation can improve market liquidity, which makes public markets more attractive for companies considering an initial public offering. In the long term, this can indirectly support corporate financing.
At the same time, the rapid growth of digital investing raises several policy questions. Many platforms rely on highly simplified interfaces, gamification features and marketing techniques that may encourage short-term trading behaviour rather than long-term investment. There are also concerns about transparency regarding costs, order execution and potential conflicts of interest.
From the perspective of BETTER FINANCE, innovation in financial services is welcome, but it must be accompanied by strong investor protection and transparency. Digital platforms should empower investors, not expose them to unnecessary risks.
Another key issue is financial education. Technology alone cannot replace informed decision-making. Investors need access to independent information that helps them understand the risks and long-term nature of equity investment.
Looking ahead, digital platforms could potentially evolve into more direct channels for corporate financing, for example through crowdfunding, digital share issuance or improved access to primary markets. For now, however, their main contribution lies in reshaping how individuals participate in secondary markets and in broadening retail engagement with capital markets.
Brussels is pushing to simplify the rulebook on sustainable finance. Will that really ease the reporting burden for SMEs, or could it just shift uncertainty about what “green” actually means?
The European Union has been a global pioneer in sustainable finance regulation, particularly through initiatives such as the taxonomy framework and sustainability disclosure requirements. These efforts aim to increase transparency and ensure that financial products labelled as sustainable genuinely contribute to environmental and social objectives.
However, as the framework has developed, concerns have emerged about complexity and reporting burdens, especially for smaller companies. SMEs often lack the resources to produce extensive sustainability disclosures or to interpret evolving regulatory definitions.
From the perspective of BETTER FINANCE, simplifying the sustainable finance framework can be beneficial, but only if it preserves clarity and credibility. Investors need reliable information to distinguish between genuinely sustainable investments and those that simply use green marketing.
If simplification merely reduces disclosure without providing clear definitions or comparable data, it risks increasing uncertainty rather than reducing it. In that case, investors may find it harder to evaluate sustainability claims, which could undermine trust in the entire system.
A balanced approach would involve proportionate reporting requirements for SMEs while maintaining robust standards for larger companies and financial institutions. For example, simplified templates or standardised indicators could allow smaller firms to report meaningful information without excessive administrative costs.
It is also important to ensure that sustainability disclosures remain useful for investors. Retail investors increasingly want to align their investments with environmental and social values, but they also expect transparency about financial performance and risks.
Ultimately, the credibility of sustainable finance depends on consistent definitions, reliable data and effective supervision. If Europe manages to simplify reporting while preserving these elements, the result could be a framework that supports both sustainable investment and economic growth.
Looking ahead to the next EU budget, if you could fund one initiative to improve SMEs’ access to finance, whether through better advice, cross-border connections, or something else, what would it be?
If we had to prioritise a single initiative, it would be the creation of a pan-European programme focused on retail investor participation in long-term investment, combined with strong financial education and investor protection.
The reason is simple: Europe does not suffer from a shortage of savings. European households collectively hold trillions of euros in financial assets, but a large share remains in low-yield deposits. At the same time, many SMEs struggle to obtain long-term financing for innovation and expansion.
Bridging this gap requires building trust between savers and capital markets. Public policies should encourage long-term investment while ensuring that financial products deliver fair value to investors.
A dedicated EU initiative could support several complementary actions. First, it could expand independent financial education programmes across member states, helping citizens better understand long-term investing, diversification and retirement planning.
Second, it could fund tools that improve transparency and comparability of investment products, enabling investors to make informed choices.
Third, it could support cross-border investment infrastructure, making it easier for retail investors to access a wider range of European companies and investment opportunities.
From the perspective of BETTER FINANCE, empowering citizens as investors is not only a financial issue, but also an economic and democratic one. When individuals participate in capital markets, they share directly in the growth of European businesses and become more engaged stakeholders in the economy.
In the long term, stronger retail participation would provide a stable and diversified source of capital for SMEs, complementing bank financing and institutional investment. It would also help build deeper and more integrated European capital markets.
For these reasons, investing in investor empowerment and trust may ultimately be one of the most effective ways to improve SMEs’ access to finance across Europe.
communications@betterfinance.eu