T.Rowe Price is the latest group to announce plans to pay for third party investment research when Mifid II kicks in at the start of next year.
Under the new rules fund managers will be required to separate trading and research costs and either pay for research directly or create a separate payment account for research costs.
T.Rowe Price joins Rathbones, Hermes, Pimco, JP Morgan Asset Management and Vanguard in outlining plans to absorb the research costs. Vanguard expects to take a $5m hit from the changes while Rathbones – which spent £900k on research last year – said it “can manage the cost within the firm”.
T.Rowe Price, which has $927bn in global assets under management, employs more than 250 investment analysts among the 500 investment professionals in its ranks.
Rob Sharps, co-head of global equity and group CIO, says: “In recent years, we have continued to invest in our alpha-generating capabilities around the globe by adding analysts focused on fundamental research, quantitative research, corporate governance, socially responsible investing, and corporate access. The supplemental third party research we receive complements our own proprietary research.
“With this decision, we have ensured that our clients’ best interests are protected while preserving our globally collaborative investment process and our access to important third-party research.”
City stockbrokers Peel Hunt, Numis and Panmure Gordon are reportedly planning to recruit more analysts and make other investments in their businesses in an attempt to keep their customers.