Paying for securities research will hit Jupiter, says Berenberg

ResearchBerenberg, an investment bank, has issued a ‘hold’ recommendation on Jupiter Asset Management shares, partly because Jupiter has said it will pay for securities research costs.

The bank said there is a 1% upside for Jupiter’s shares, compared to 15% for Schroders and 13% for Ashmore. Aberdeen Asset Management has a 0.3% downside.

Jupiter, along with several other firms, has said it will pay for securities research out of its own pocket rather than pass the costs on to investors.

Currently all asset managers are under pressure to do the same under the MiFID II capital market reforms, though firms can continue to charge clients if they comply with certain MiFID rules from January 3, 2018.

“Berenberg believes Jupiter has a challenging year ahead, having decided to absorb sell-side research payments and remove box profits by 2018,” Berenberg said as it initiated research on the four asset managers.

Funds Europe reports here on broker research ‘unbundling’ in the latest issue, highlighting that a number of firms are yet to decide a policy on research funding.

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