MiFID II drives 20% cut in fund manager research budgets

$300m reduction in external research budgets

Fund managers in Europe have cut their research budgets for 2018 by 20%, which is "more aggressive budget cutting" than previously predicted, as MiFID II drives a reduction in number of research providers they use, according to a survey.

According to US consulting firm Greenwich Associates, the decline in spending is largely driven by a more selective approach to buying research from a smaller number of banks, reported Bloomberg. The Europe-wide regulation MiFID II, which came into force on 3 January, require research costs to be unbundled from trading costs and clearly identifiable when charged to a client. Many larger UK asset managers have chosen to absorb these costs, rather than pass them on to the client. MiFID II blog: Industry progress as we reach implementation day Associate director at Greenwich Associat...