MiFID II – Research unbundling concerning Asset Managers

Market research has shown that over 70% of asset managers are re-examining their sources of research due to MiFID II, requiring them to unbundle broker research costs from other services and either absorb research costs or set up a research payment account.

But research conducted by Electronic Research Interchange (ERIC), found that 74% of managers will both apply greater scrutiny to sources of research and also foresee a reduction in investment bank research.

ERIC’s European asset management survey also found that 38% of asset managers are considering expanding internal research teams and the same percentage are not confident of being prepared for MiFID II unbundling.

However, the firm found asset managers broadly agree that the aims of MiFID II unbundling rules are “virtuous”. But over 74% believe that the buy-side should bear the cost of research.

Additionally over half of respondents highlighted the rise of alternative research distribution platforms as the answer, through which asset managers will be able to access specific and targeted pieces of research for a clear fee.