The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Research: Fund managers get more choosy

Unbundling of commission regulation will increase independent data provision.

Research by investment management consultancy firm Investit indicates that the new regulation requiring the unbundling and reporting of commission spent by the buy side on execution and research is putting pressure on fund managers to justify the sell-side research they are using.

As of January this year (following the publication of PS05/9 by UK regulator the Financial Services Authority), fund managers in the UK have to make known to clients what is being spent out of those clients’ commission on research and execution. In the US, the SEC is known to be considering a similar approach. “If managers have been reliant on broker research bought with client commission, they will need to be able to demonstrate the value of that research,” says Richard Phillipson, principal at Investit. “And if fund managers need to quantify the value of research, it is likely that there will be rating systems springing up that can help judge research objectively. At the moment, managers tend to divide commission among brokers by a voting system that they will find hard to explain.”

Pressure on brokers

Phillipson believes that now research costs are to be displayed separately there will be pricing pressure on the brokers providing research, and fund managers will be more selective.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree