Asset managers 'underpaying' for research could see access cut following MiFID II

A number of asset managers could lose access to investment research following the implementation of MiFID II, as their current payments to research providers are likely to be insufficient under the directive, according to Chris Turnbull, co-founder of research platform ERIC.

He said a "considerable number" of small-and mid-sized asset managers are underpaying for unfettered access to research because payments are currently correlated to trading volumes. Theoretically, this leads to larger managers paying higher fees for the same level of research as their smaller counterparts. MiFID II research unbundling to increase M&A pressure on small/mid UK managers However, under MiFID II, rather than being charged a variable periodic payment, asset managers will be forced to allocate a research budget which is then charged to their own account. This fee can then ei...