RSRCHXchange asset management survey reveals expected decline in bank research spend ahead of MiFID II
Poll of 234 asset managers reveals that only 13% expect to continue to pay for research from all leading investment banks
London, 12 January 2017: RSRCHXchange, the online aggregator and marketplace for institutional research, today released the results of a survey analysing the readiness of asset managers for the research unbundling rules coming into effect in January 2018 as part of MiFID II. The survey was conducted towards the end of last year by polling company Survation, who canvassed the views of 234 respondents, representing over 200 firms and $15trn of AUM, making this the biggest survey of its kind.
The survey shows a distinct shift of research budgets away from the top nine investment banks, with just 13% of respondents expecting to pay for research from all of the largest banks and 72% expecting to use research from less than five banks. The dominant market share of the global investment banks is likely to come under pressure with 67% of respondents expecting these banks to constitute less than 60% of their research spend going forward.
Overall, fund management firms did not expect research budgets to fall dramatically. 42% expect their firm’s research budget to remain the same in the next two years and 26% expect budgets to rise.
The asset management industry has significant work to do in order to comply with MiFID II unbundling requirements, but firms are planning on early adoption. Around half of the respondents who expressed a view expect to be compliant by the middle of 2017. Setting and regularly assessing a research budget was seen as the biggest challenge to complying with MiFID II (37%), while assessing the quality of research was the next largest concern (23%).
Even at this stage, 50% of respondents are undecided on how they will pay for research under MIFID II. 38% of those who did express a view on how they will pay for research said they would be paying from their own P&L.
Other results from the survey included:
- 86% of US funds anticipate the MiFID II rules on research unbundling to impact them eventually
- 54% of respondents at the biggest funds expected their research budgets to fall
- Written research is by far the most valued and most frequently consumed of all the research services
The full survey results can be requested here.
Jeremy Davies, Co-Founder of RSRCHXchange, said: “The landscape of institutional research is shifting and asset managers are reviewing and adjusting their working practices to keep pace. Some of the results of this survey will come as a surprise to the industry, especially the decline in research spend with the big banks.”
He added: “At RSRCHXchange we have anticipated significant changes in the institutional research space and have set up an aggregator that can handle research procurement and consumption in a MiFID II-compliant way. We are pleased to see the market voting with their feet, with over 1,000 asset management firms signed up and around 185 research providers posting their research notes and subscription content to our platform.”
Matt Fincham, Streets Consulting
Phone: 020 7959 2235
RSRCHXchange is THE online aggregator and marketplace for institutional research. Built in consultation with asset management institutions and research providers, the RSRCHX platform is a research aggregation, procurement and management solution for institutional asset managers which radically modernises the way in which financial institutions buy and sell research.
Ahead of MiFID II unbundling changes coming into force in January 2018, the RSRCHX platform enables buy-side firms to access institutional research from over 185 providers in a more efficient, discerning and transparent way. The RSRCHX dashboard offers an automated way for asset managers to track firm- wide research consumption, to rate and evaluate the content they receive, to improve the procurement process and to ensure MiFID II compliance. At the same time, research providers benefit from access to a growing community of global buy-side firms and efficient payment, compliance and administration processes designed to help analysts focus on what they do best: producing insightful research.
Launched in September 2015 and headquartered in London, RSRCHXchange is the only research marketplace built to the specification of the international fund management industry, by experts with decades of fund management and research procurement experience. Our founders are committed to ongoing collaboration with both domestic and international asset management and research communities and continue to invest in additional functionality and platform enhancements. To find out more please go to http://rsrchxchange.com or follow us on Twitter @rsrchx.