Abstract
Introduction: In this chapter I analyse yrig the new MiFID II regime concerning investment advice, and in particular independent investment advice. There are important new provi-sions concerning investment advice and it is clear that the directive places a lot of emphasis on the role of independent investment advice as an instrument to restore trust and help investors, especially retail ones, in taking financially sound decisions concerning their savings.
The chapter is organized into four further sections. Section II provides background for the growing importance attributed to financial advice as an instrument to improve the overall efficiency of financial markets. It reviews the main economic literature on households’ biases and the role that advice plays in their investment decisions. Section III briefly analyses the MiFID I regime and highlights its main issue, namely the ambiguous boundary between investment advice and the related suitability as-sessment, and guidance or promotion, with the much more forgiving appropri-ateness test or execution- only regime. Section IV focuses on MiFID II provisions concerning investment advice, exploring some of the main problems emerging from the new framework, which must be understood as an attempt to nudge European investors towards independent investment advice. Section V concludes.