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Under the far-reaching rules, asset managers will have to make clear to clients how much they are being charged for research such as analyst notes, ending the opaque practice of investment banks and brokers providing research for free in return for fund houses placing trades. In a bid to avoid onerous requirements, many of the world’s largest asset managers, including BlackRock, Vanguard and JPMorgan, have decided it would be easier and fairer to cover the cost of investment research themselves. But a spokesman for Edouard Carmignac’s investment house, which is France’s largest independent asset manager, said the company was holding firm on its decision to charge investors for research. He argued that passing the costs on to clients would provide several benefits, including better cost transparency for investors. “If absorbing the cost of research becomes the market standard, it will disadvantage European active asset management houses against US-based asset managers, and Europe will lose the three benefits of transparency, research coverage and low barriers to entry,” he said.
Carmignac said: “Whatever the industry as a whole decides, as an active management house with an independent business and mindset, we will continue to value the cross-fertilisation of in-house research with external research.”
Full article on Financial Times (subscription required)