More than three-quarters of European investment professionals expect to source less research from external providers after MiFID II is implemented in January, according to a survey by the CFA Institute.

The poll of 365 CFA members from across Europe found that 78% expected to source less research from investment banks, while 44% said they would beef up their internal research capabilities.

Rhodri Preece, head of capital markets policy for EMEA at the CFA Institute and author of the report, said the organisation supported the aims of MiFID II but warned “the rules are not a panacea”.

“Some respondents were concerned about unintended consequences, including a decrease in the availability of research and a reduction in research coverage,” Preece added.

MiFID II requires asset managers to unbundle the cost of investment research from that of trading securities, which in turn requires an explicit price for research to be set. So far the vast majority of managers have decided to absorb research costs onto their balance sheets, with just Fidelity and Amundi among Europe’s biggest providers currently planning to pass the cost on to clients.

A spokeswoman for Amundi told IPE the firm had not made a final decision on the matter, although CEO Yves Perrier has given a strong signal that the company was leaning towards passing the costs on.

Respondents to the CFA survey predicted an average annual cost of 10 basis points for equity research, and 3.5 basis points for fixed income, currencies and commodities. However, the CFA noted that there was a “wide range of responses”.

CFA members working at providers running more than €250bn were more likely to expect their employer to pick up the cost of external research (67%), while 42% of those working for managers with less than €1bn expected this.

Overall, 53% of respondents expected their employers to foot the research bill, with 15% expecting them to pass it on to clients. One in five were unsure and 12% expected a mixed attribution of costs.

The CFA added: “Respondents raised concerns over a possible competitive disadvantage for smaller firms, echoing industry fears that the changes could result in the loss of some small businesses and further industry consolidation in favour of major global organisations.”

Who pays? How Europe’s top institutional managers will pay for research

IPE is tracking asset managers’ decisions on the unbundling of MiFID II research costs based on our annual list of the Top 120 European institutional managers.

So far, 49 managers have declared their intentions, with just four planning to charge clients directly. Amundi and its subsidiaries Pioneer and CPR will charge clients, as will Fidelity as part of a global overhaul of its equity fund fee structure.

For updates/queries relating to this list, please contact

Last updated: 21 November 2017

CompanyAUM (€m)Who pays?
BlackRock 911,955 Manager
Legal & General IM 792,950 Manager
Insight IM 537,983 Manager
Aberdeen Standard Investments 393,759 Manager
Amundi 309,169 Client
State Street Global Advisors 304,949 Manager
Deutsche Asset Management 230,789 Manager
Goldman Sachs AM 223,210 Manager
Credit Suisse AM 215,458 Manager
UBS Asset Management 169,643 Manager
Schroders 139,634 Manager
JP Morgan Asset Management 131,707 Manager
AXA Investment Managers 125,466 Manager
Allianz Global Investors 91,402 Manager
HSBC Global AM 90,636 Manager
Robeco Group 80,105 Manager
Morgan Stanley IM 76,776 Manager
Northern Trust AM 67,379 Manager
Union Investment 63,812 Manager
Columbia Threadneedle Inv. 63,545 Manager
Vanguard Asset Management 61,837 Manager
Baillie Gifford & Co 52,857 Manager
Vontobel Asset Management 51,276 Manager
Record Currency Management 48,552 Manager
Newton Investment Management 43,719 Manager
Aviva Investors 42,856 Manager
CBRE Global Investors 41,000 Manager
Janus Henderson Investors 40,997 Manager
Erste Asset Management 37,606 Manager
NN Investment Partners 36,382 Manager
Pioneer Investments 34,059 Client
Invesco 34,004 Manager
Hermes Investment Management 33,423 Manager
Kempen Capital Management 32,274 Manager
RBC Global AM 31,441 Manager
CPR Asset Management 27,536 Client
Barings 25,894 Manager
Russell Investments 24,922 Manager
Muzinich & Co 24,648 Manager
MFS Investment Management 24,643 Manager
Fidelity International 23,281 Client
Investec Asset Management 21,142 Manager
Franklin Templeton Investments 19,440 Manager
BlueBay Asset Management 18,565 Manager
Unigestion 14,968 Manager
J O Hambro Capital Management 14,773 Manager
T Rowe Price 11,759 Manager
First State Investments 11,282 Manager
TwentyFour AM 9,175 Manager

Notes: AUM figures relate to European institutional assets only, and are expressed in euros. Data from IPE’s Top 400 Asset Managers survey, correct to 31 December 2016.

This article has been amended to clarify that Amundi has yet to fully confirm its intentions regarding research cost unbundling.