Industry Insights - Capital Markets Reform: How Ireland’s Retail Investor Transformation Can Create a Blueprint for Europe

All eyes remain on Ireland during its EU Presidency as the country prepares to navigate a generational shift in how household wealth is deployed, moving beyond a reliance on bank deposits and toward greater participation in long-term investing. 

The discussion extends well beyond Ireland. Across Europe, policymakers are looking for ways to strengthen the region's competitiveness, deepen capital market integration, and empower retail savers to play a greater role in supporting economic growth. 

In this article, we explore what these changes mean for the fund industry and why Ireland's approach could provide valuable lessons for markets across Europe. 

A Pivotal Moment 

Ireland has a unique opportunity to take a leading position on the modernization of capital markets in Europe. Over the past three decades, the country has built a world-class international financial hub. Today, Irish servicing platforms support over €4 trillion in global investment assets, acting as Europe's primary gateway for UCITS funds –including domiciling over 70 percent of all European ETFs.  

Yet despite this international prominence, much of Ireland’s domestic household wealth remains locked in cash. Over €170 billion1 in household savings sits in low-yield bank deposits, steadily eroding under inflation. 

Now change is on the horizon. The government is pursuing an ambitious agenda to modernize domestic finance. The rollout of My Future Fund (pension auto-enrollment), alongside legislative plans for national Savings and Investment Accounts (SIAs), signals a deliberate policy shift to activate domestic capital and simplify retail investing. 

Implications from a European Perspective

Crucially, Ireland’s reform agenda directly reflects systemic challenges faced across Europe. As highlighted by former ECB President and Italian Prime Minister Mario Draghi in his landmark report on European competitiveness, Europe faces an annual investment deficit of €800 billion2 to fund the green transition, digital modernization, and economic security. 

Across the EU, household financial assets exceed €10 trillion3, yet most of this sits idle in bank accounts. Meanwhile, productive capital migrates to US markets, which benefit from deep retail liquidity and seamless wrappers like 401(k)s. In response, the European Commission’s Savings and Investments Union (SIU) strategy explicitly calls on Member States to break down market frictions and empower citizens to invest in Europe's real economy. To achieve this vision, key SIU reforms (such as an EU depositary passport) will be vital to removing cross-border barriers and allowing servicing platforms to scale across the European Union. 

Building a Long-Term Investment Culture  

This is why Ireland’s EU Presidency represents such a unique opportunity. It offers a window not only to deliver a domestic transformation for Irish citizens, but also to establish a tried-and-tested blueprint for the Savings and Investments Union across Europe. 

To translate policy ambition into a workable national framework, however, Ireland’s policymakers, regulators, and market participants must focus on five strategic pillars: 

1. Fostering a culture of long-term investing: Unlocking €170 billion requires shifting the national mindset from saving to investing. This depends on public policy measures that build financial confidence, such as financial literacy programs, dedicated junior accounts, and automated digital savings tools. 
    

2. Designing simple, tax-efficient account rules: An Irish SIA framework needs to reduce tax complexity by replacing cumbersome rules such as Ireland’s eight-year Deemed Disposal with a simple flat-tax account wrapper. However, because contribution caps will limit how much capital an SIA alone can absorb, unlocking household wealth also requires broader tax reform. In an international context, Ireland's 33% Capital Gains Tax (CGT) and 38% fund tax rates remain high. Reforming the broader CGT regime and aligning fund tax rates will ensure investing outside the SIA wrapper is also an attractive option.  
    

3. Bridging the domestic advice gap: Ordinary citizens should not be priced out by traditional wealth management fees. Streamlining disclosure rules and account structures lowers the cost of compliance, enabling providers to offer easy-to-use digital services to everyday savers. 
    

4. Combining workplace pensions with flexible savings: Retirement accumulation through My Future Fund represents a critical long-term foundation. However, households also require short-term access to their savings. Allowing employers to offer liquid SIA options alongside locked pension schemes creates a more holistic financial package. 
    

5. Fulfilling the social contract: For 30 years, Ireland’s funds industry has operated as an institutional export sector. As domestic retail participation grows, national policy and industry practice must align around a broader public purpose that supports economic growth and financial security for citizens. 

These pillars are not isolated policy levers, but interconnected elements of a single, unified strategy. It will take coordination between government, regulators, and service providers to turn the policy vision into an accessible, everyday reality for Irish households. 

The Infrastructure Challenge 

Policy sets the vision, but the fund industry will need to address a number of infrastructure challenges. For three decades, Ireland’s servicing ecosystem has been optimized for institutional scale. A mass market creates the need for new backend "rails," capable of supporting millions of retail investors making small monthly contributions. 

In particular, investment infrastructure needs to evolve in four key areas: 

• Micro-accounting and fractional shares: Handling €20 monthly contributions requires robust share accounting engines to track micro-ownership down to a fractional level, without administrative overheads eating into investor returns. 
   

• Distributed Ledger Technology (DLT) and Tokenisation: The ability to handle high-volume micro-transactions at scale will be greatly enhanced if Ireland embraces emerging technologies like DLT and tokenisation. As highlighted in the Central Bank of Ireland’s ongoing review of DLT implementation (Discussion Paper 12), adopting these technologies can significantly reduce cross-border frictions and operational costs. 
   

• Open architecture and digital distribution APIs: Retail investors will not access funds through institutional channels. They will invest through neo-broker apps, bank platforms, workplace portals, or local post offices. Administrators must build APIs that seamlessly connect transfer agency systems to these endpoints. 
   

• Automated tax handling: Everyday investors shouldn't need a tax advisor to buy a fund. Investment platforms must calculate and withhold any tax owed automatically at the account level. 

A Bigger Role for the Fund Industry 

Beyond the backend infrastructure, this transformation requires a cultural shift in Ireland’s funds sector. For three decades, the industry has thrived as an export powerhouse focused on servicing institutional assets. But if the fund sector ends up managing household savings as envisaged, it will be thrust into the public spotlight. Questions around consumer protection and fee structures will take center stage in the Dáil and across national media. To build lasting trust, financial institutions will need to demonstrate that they are acting as responsible stewards of citizen wealth. 

This shift will reshape the industry's talent, skills, and broader public purpose. There will be a need for new capabilities, ranging from digital product design and retail compliance to the ability to communicate clearly with retail investors. At the same time, industry leadership bodies like Irish Funds will see their mandates evolve, for example, to take a leading role in national financial literacy. This transition offers the sector a singular opportunity to demonstrate its contribution to citizens’ financial wellbeing. 

From National Framework to European Blueprint 

The development of the Savings and Investment Account framework represents more than a local policy issue. The solutions pursued in Ireland should be seen as an opportunity to modernize domestic finance, support European competitiveness, and redefine the funds industry's role in society. By pairing ambitious policy design with a modern digital investment infrastructure and a commitment to citizen wealth, Ireland can build a retail investment framework that powers domestic prosperity and sets the gold standard for Europe. 

1. https://www.irishtimes.com/special-reports/2026/05/22/unlocking-household-savings-with-over-170bn-sitting-in-bank-deposits-could-boost-local-fund-participation/

2. https://www.theguardian.com/world/article/2024/sep/09/eu-mario-draghi-report-spending-boost

3. https://commission.europa.eu/news-and-media/news/savings-and-investments-union-better-financial-opportunities-eu-citizens-and-businesses-2025-03-19_en