BlackRock and Axa IM have said they will stump up for external research as pressure grows on groups that have not yet declared their intentions for when the new Mifid II rules come into play in less than four months’ time.
Fund houses are faced with the decision of whether to absorb the cost of external research themselves or pass it on to investors as the January deadline approaches, with the option of exchanging research from brokers in return for trades no longer available under the new regulations.
A spokesperson for BlackRock says: “Delivering the best outcomes for clients requires superior research that combines deep in-house capabilities with the best available external research.”
“BlackRock’s internal research capabilities today include more than 300 professionals and leverage BlackRock’s unique technology, global platform and scale. We are committed to developing our internal capabilities, while ensuring our teams retain access to external research that adds value to the investment process. From January 2018, any external research costs incurred for Mifid-impacted funds and client accounts will be paid for by BlackRock.”
Axa Investment Managers will extend its plans to absorb research costs to all its funds and not just Mifid II accounts, the firm has revealed.
Subject to local regulation, Axa IM will now pay for the “active research” across all the funds it manages globally, in a move that will differentiate the French firm from its competitors.
Axa IM chief executive Andrea Rossi says:“In order to prepare the implementation of Mifid II, Axa Investment Managers has undertaken a thorough analysis of our internal research capabilities and our need for externally produced research.
“As an active manager, research is at the heart of our investment process and our managers leverage both our extensive internal research and externally produced research to develop the most efficient investment processes and identify the best alpha sources to best serve our clients’ needs.
“We remain committed to active research and at the same time have made the decision to fully absorb the costs associated with the external research we utilise on our clients’ behalf. We feel this is the most appropriate approach to deliver the best results for our clients, provide clarity in their fees and best serve their interests.”