These new regulations are set to revolutionize the investment journey for Portuguese citizens, providing them with more meaningful information, clearer understanding of costs, and increased investor protection. Let's explore the key highlights of these transformative rules.

Meaningful Information for Everyday Investors

The updated disclosure rules have been adapted to the digital age, prioritizing the provision of standardized and relevant information that aligns with investors' sustainability preferences. This means that retail investors in Portugal and across the EU will now have access to improved information about investment products and services. This will enable them to make more informed decisions that are in line with their values and goals.

Transparency and Comparability of Costs

Recognizing the importance of cost transparency, the new rules require the use of standard presentation and terminology for costs. This ensures that retail investors in Portugal and across the EU can easily compare costs across different investment products, allowing them to select options that provide genuine value for their hard-earned money.

Clear Investment Performance Evaluation

To promote transparency and accountability, all retail investors in Portugal will receive an annual report that provides a clear view of their investment performance. This measure gives investors a comprehensive understanding of how their portfolios are performing. It enables them to make well-informed decisions about their investments and financial goals.

Addressing Conflicts of Interest

The new rules aim to safeguard the best interests of retail investors by banning inducements for "execution-only" sales and prioritizing financial advice that aligns with investors' interests. Stricter safeguards and transparency measures are being introduced to protect retail investors from potential conflicts of interest and to enhance the overall integrity of the distribution of investment products.

Protection Against Misleading Marketing

Misleading marketing practices can pose significant risks to retail investors. In Portugal and across the EU, financial intermediaries, including advisors, will now bear full responsibility for the use (and misuse) of their marketing communication. This accountability extends to social media platforms, as well as engagements with celebrities or third parties they remunerate or incentivize. These measures ensure that retail investors in Portugal are protected from deceptive marketing tactics.

Preservation of Professional Qualifications

Maintaining high standards of professional qualifications for financial advisors is crucial for building trust and confidence in the investment landscape. Portugal is committed to preserving these standards, ensuring that retail investors can rely on competent and qualified professionals to provide them with reliable advice and guidance. This contributes to a more secure investment environment.

Enhancing Financial Literacy

Recognizing the importance of financial literacy in making informed financial decisions, Portugal encourages the implementation of national measures that support citizens' financial education. These measures aim to empower individuals, regardless of their age, social background, or educational level, to make better financial choices and secure their financial well-being.

Streamlined Accessibility for Savvy Investors

To simplify processes and expand access to investment products and services for sophisticated retail investors, Portugal and the rest of Europe will adopt more proportionate eligibility criteria for becoming a professional investor. These measures aim to reduce administrative burdens and foster a more inclusive investment environment.

Enhanced Supervisory Cooperation

To ensure the effective application of the rules, enhanced supervisory cooperation between national competent authorities and European Supervisory Authorities will be implemented in Portugal. This collaboration aims to create a cohesive and fraud-free investment landscape, providing retail investors in Portugal with added security and peace of mind.

Looking Ahead

Portugal's implementation of these new rules signifies a significant milestone in empowering retail investors and transforming the investment landscape. By prioritizing meaningful information, transparency, investor protection, and financial literacy, Portugal is taking proactive steps to ensure that its citizens can make informed and confident investment decisions.

These comprehensive measures set a benchmark for other countries, fostering a culture of financial empowerment and creating a fair and inclusive investment environment. As these rules come into effect, Portuguese retail investors can expect greater transparency, improved access to information, and enhanced investor protection, allowing them to navigate the investment landscape with confidence and work towards their financial goals.

For help and advise on retail investment, get in touch with our Blacktower Algarve office on +351 289 355 685.

This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.