All four institutions previously indicated they would pass this cost on to clients as part of fund management charges. Under MiFID II rules coming into force in January, asset managers must disclose separately the costs for independent investment research. Currently, for equity funds, these costs are included in transaction charges and broker commission.
In a statement, Schroders said it had decided to extend its existing policy not to pass on costs – currently applicable to its quantitative and fixed income strategies – to include its entire equities business. Schroders’ global CEO Peter Harrison had indicated that it would continue to charge clients, but in the statement he said the firm had “concluded that we should absorb the cost of research for those clients affected by MiFID II”.
Hans Joachim Reinke, CEO of Union Investment, said of his firm’s decision: “From the outset, our objective was that the total amount of future transaction and research costs would not be any higher than they are currently. We therefore anticipate that, following our decision, the total costs for our customers will be lower.”
Invesco said: “We are committed to ensuring our investment professionals have access to the external research market, which is critical to decision-making and delivering the long term investment excellence our clients have come to expect from Invesco.”
Janus Henderson Investors also issued a statement saying it would pay for research, contrasting with earlier reports that it intended to pass the cost on. Co-CEO Andrew Formica said there had been “a marked shift in the delivery and pricing of research”.
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