Fund groups are taking on more analysts from investment banks on the back of European regulatory change as large brokers increase their focus on Brexit, recruiters say.
Under Mifid II, asset managers are required to separate the cost of broker research from portfolio transaction costs and, in most cases, are bearing the costs internally.
The new rules have resulted in a number of investment banks making cuts and have led to analyst redundancies as fund firms become more selective in the external research they use.
However, Morgan McKinley senior consultant Caleb Hawkings tells Money Marketing big brokers are more concerned about coping with Brexit-related issues than Mifid II.
He says: “We expected a greater volume of candidates leaving the large top-tier banks, especially since the go-live of Mifid II. But the banks have moved the majority of people internally to focus on key regulatory projects, such as Brexit. Brexit has been one of the main areas of compliance hiring in the first quarter of 2018.”
St James’s Place chief investment officer Chris Ralph says fund management firms are taking more research in-house and most of the resources come from investment banks.
He says: “We have got to a position where none of our clients are paying [for research] any more because of Mifid II. Therefore, that cost is being borne by our fund managers.”