Hermes to stop passing research costs to clients

Ahead of changes under MiFID II

Hermes Investment Management has become the latest provider to decide to absorb external research costs rather them pass them onto clients, ahead of huge changes in this area when MiFID II is implemented at the start of 2018.

According to a report in The Financial Times, Eoin Murray, head of investment at Hermes, described the move as "the right thing to do in terms of the end beneficiary". "When we looked at the cost of [alternative] arrangements [whereby research costs are passed on to clients] and the amount of compliance you have to put in around those, the difference in budget was not huge," he told the paper. How to choose an equity research provider under MiFID II Murray also told the FT that Hermes has already held meetings with three quarters of the 60 research providers it uses to discuss pric...