A large majority of fund management groups stated they will be compliant on Mifid II rules at the end of 2017, but research providers still fail to engage with groups on pricing setting, a survey shows.
Fintech firm RSRCHXchange reveals asset managers are fully aware of the changes MifidII will bring on the way investment research is charged. According to the regulation that will come into force in January 2018, asset managers will need to decide whether to charge clients for research or pay it themselves.
More than a half of asset managers have already set or begun to set their research budgets and are also deciding on which payment method to use choosing from transactional research payment account, RPA funded by a direct charge to the client,or a hybrid model.
The poll, which was conducted in the second quarter of this year, surveyed over 560 asset managers running over £100bn assets.
But despite the readiness, lack of information on pricing from research providers is seen as a challenge by 40 per cent of fund managers. The survey says 23 per cent of respondents have not received pricing information from any of their providers leading a great majority (77 per cent) to believe the number of providers is destined to fall.
RSRCHXchange co-founder Jeremy Davies says although asset managers have started to come up with the changes on the way they charge for research as commanded by Mifid II, research providers are still behind on setting up prices.
Co-founder Vicky Sanders adds: “Some of the results of this survey will come as a surprise to the industry, especially the expected decline in the number of research providers. In anticipation of these unbundling changes, we have set up an aggregator and marketplace that ensures asset management firms can maintain the diversity of views that they require to generate alpha.”