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Asset managers expect to bear millions in Mifid II research costs

Careful-Research-Business-Finance-Paperwork-700.jpgAsset managers could see the cost of analyst research averaging $10m for every $10bn of equity assets under management when the new Mifid II rules take effect in January.

Under the new regulation, asset managers will be required to separate the cost of research from portfolio transaction costs.

According to a survey by the CFA Institute, which canvassed 365 individuals from 330 asset managers and other investors across Europe who use or create investment research, the median cost is forecast to be 0.1 per cent of assets under management a year, the Financial Times reports.

However, Rhodri Preece, head of capital markets policy for Europe, the Middle East and Africa at the CFA Institute, says there is still uncertainty surrounding the impact of research costs on asset managers.

“Price negotiations are ongoing,” he says. “[The costs] will vary according to the strategies and bargaining power of the asset manager.”

Meanwhile Marlborough Fund Managers has announced that external investment research costs will be absorbed by the firm under Mifid II rules.

The boutique, which has a range of 19 funds, says it will pay for research from its own resources while companies running their funds externally will meet the research costs.

Wayne Green, joint managing director of Marlborough Fund Managers, says: “Marlborough is committed to adding as much value as possible for our investors, so from January external investment research costs will be absorbed rather than passed on.

“As a company we have always made every effort to ensure that as many as possible of the costs associated with running our funds are absorbed by us and that those applied to the funds, and so our investors, are kept to a minimum.”

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  1. Nicholas Pleasure 20th November 2017 at 2:55 pm

    Is this the same asset managers that the FCA is attempting to get to lower their prices? Don’t look for joined up thinking from our regulators.

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