With MiFID II rules coming into force on 3 January, Europe’s largest asset managers have been grappling with how to comply with the requirement to unbundle the previously implicit charge for third-party investment research.
Amundi will directly foot the bill for external investment research, as will several major Dutch asset managers. PGGM has yet to decide.
Amundi made its decision last week. Contrary to the stance it had previously indicated it was leaning toward, it will cover the cost of third party investment research itself. This will also apply to its subsidiaries Pioneer and CPR Asset Management.
It did not make a formal announcement, but a spokesman said the manager decided to absorb the costs given the consensus among other asset managers. More than half of the total cost of research used by Amundi’s portfolio managers came from in-house research, it was suggested. External research accounted for a low share of the manager’s total cost base.
Surveys carried out in the Netherlands show that the vast majority of managers plan to absorb costs onto their balance sheets, confirming the picture that has emerged over the course of 2017.
Two groups are understood to be setting up ‘research payment accounts’, which will charge research costs directly to investment funds – i.e. the client foots the research bill.
These are Fidelity, which incorporated the shift within a bold restructure of its equity charging structure, and Germany’s Metzler Asset Management.
A number of companies indicated that the MiFID II research rules would have little effect on their operations. Pantheon planned to absorb costs but given its primary focus is private equity, this would not make much difference to its business model, it has said.
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