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More firms remove “burden” of MiFID II broker research costs

ReportsTwo more asset managers have said they will pay broker research costs under revised capital markets rules that come into force on January 3.

Deutsche Asset Management and Franklin Templeton Investments both said this morning they would pay for external securities research from their own pockets under the updated Markets in Financial Instruments Directive (MiFID II).

The move puts pressure on other assets managers to follow suit rather than charge clients.

Deutsche AM suggested that clients of fund managers who will continue to pay for securities research were “burdened” by the fees.

Paying for research from its own business means that “Deutsche AM’s clients will therefore not be burdened with additional costs,” the firm said.

Nicolas Moreau, who is head of Deutsche AM and a member of Deutsche Bank’s management board, sent an email to the asset manager’s staff this morning. “We strongly believe that our approach is the best possible solution to the requirements of the new directive and that it will allow us to remain fully committed to delivering market-leading solutions to our clients,” he said.

Deutsche AM will negotiate with its third-party research providers to optimise costs, the firm also said.

A Franklin Templeton Investments statement said: “We will pay for third-party investment research for client accounts covered by the European Union’s Markets in Financial Instruments Directive II regulation. We have adopted this approach to ensure that all of our clients will continue to benefit from both our collaborative global research process and our access to third-party research.”

Aberdeen Standard and Aviva Investors also said this week they would pay research costs from their own balance sheets.

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