View more on these topics

Mifid research rules could hit asset manager profits 29%


European asset managers’ operating profits could decline 17 to 29 per cent because of research unbundling required under Mifid II, analysis by S&P Global has found.

Crisil, an S&P company, believes most large European asset managers will absorb research costs, rather than adopting research payment accounts, which it describes as a “strenuous” process.

The cost of RPAs can be borne by investors but involves additional disclosure, budgeting, reporting and auditing.

The analysis anticipates a 17 per cent hit to operating profits for an asset manager with 35 per cent exposure to equities and with 80 per cent of equity costs absorbed by the firm, while 20 per cent is borne by brokers.

However, in asset managers where 40 per cent of assets are in equities and all research costs are born by them profits could take a 29 per cent hit.

The report predicts a 9 to 16 per cent hit to profits for US managers with funds in Europe. It predicts that as investors benefit from lower costs in Europe, the US regulator will implement unbundling.



FCA levels playing field for investment trusts with Mifid II decision

The Association of Investment Companies has welcomed the FCA’s decision not to consider investment company shares to be automatically “complex” under Mifid II. The AIC says the suggestion that investment trusts should fall under this definition had put them at a competitive disadvantage to other investment products. Retail investors in complex products must be assessed for “knowledge […]


FCA plans to tighten investment research payments under Mifid II

The FCA has proposed to ban independent advisers and portfolio managers from accepting payments from third party firms on investment research. According to the third FCA Mifid II consultation paper, published today, only certain research products such as commentary on market moves or company results may be exempt as “minor” and “non-monetary.” Mifid II will […]

The waiting game: Delay to “impossible” Mifid II deadline leaves advisers in limbo

Experts fear the delayed deadline for implementing Mifid II means clarification of Europe-wide rules for advisers on charges disclosure and inducements are a long way off from materialising. The European Commission announced last week the deadline for member states to comply with the legislation would be delayed due to the “exceptional” challenges firms and regulators […]

Happy while you work

Well we’ve had scorching weather (yes even up here in Scotland!) and now the Euros 2016 are on – you can’t blame people for wishing life was just one big holiday.  With all these distractions it sometimes feels like work just gets in the way of having a good time! But sunny day skivers are […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment