Aberdeen Standard and Aviva to cover MiFID II research costs

ResearchUK-listed Aberdeen Standard Investments and Aviva Investors have become the latest finance houses to confirm they plan to absorb the cost of external research when the EU’s revised Markets in Financial Instruments Directive, known as MiFID II, comes into force in January 2018.

While a small number of firms, such as Schroders, Union Investment, Amundi and Janus Henderson, have said they will charge investors for external research costs, the majority of large asset and wealth managers that have so far announced their intentions plan to absorb broker research costs from their own funds.

These include Northern Trust Asset Management, JP Morgan Asset Management, Pimco and Vanguard.

Meanwhile, a number of large firms, such as BlackRock, Deutsche Asset Management and Natixis, have yet to make a decision on whether to shoulder or pass on research and analysis costs before the new rules come into force on 3 January 2018.

A press statement from Aviva Investors said: “We believe this will ensure greater certainty and transparency around our charges and is in the best interests of our clients.

“We will continue to select external research partners who provide high quality analysis and value for money and continue to invest in our own internal research capabilities.”

The decision by Aberdeen Standard Investments, the investment arm of newly-merged Standard Life Aberdeen, that it would absorb research charges follows that of Aberdeen Asset Management which earlier this year, prior to the merger, confirmed it would absorb such costs.

A spokesman for Aberdeen Standard Investements said: “External research is an important and valuable input to our exceptional in-house research capabilities and we remain committed to our portfolio management teams’ ability to maximise active research insights across regions and asset classes for the benefit of all clients.”

The MiFID II directive aims to increase transparency by bringing to an end the current opaque system whereby fund managers receive research for free in return for placing trades with investment banks.

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