Under MiFID II, interactions with clients are more closely tracked, making it easier for individual analysts to see how much they are worth. Big prizes are likely to go to the most experienced and sought after. After the dotcom boom — when top names had major followings and could single-handedly win new corporate clients — there was a steady decline in the status of investment analysts. Their heady days came to an end in the early 2000s, when regulators stepped in after finding some were excessively optimistic about certain tech companies to win bookrunning business.
Investment banks have already reduced their charges for the cheapest research — consisting of written reports only — from the six-figure annual sums mooted after MiFID II was first announced, to between roughly $10,000 and $30,000. Many of the biggest banks are subsidising the cost of providing written research for less with more expensive “high-value” interactions with analysts. The price for a call with an analyst is between $1,000 and $5,000 an hour, justified by the promise of exclusive insight. Other more costly services on offer include organising corporate roadshows and facilitating access to a company’s management.
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