Schroders latest to reverse research charges plans post MiFID II

Schroders has signalled that it has reversed plans to charge investors for external investment research after MiFID II comes into effect next year, following similar decisions by major competitors.

MiFID (Markets in Financial Instruments Directive) II, intended to increase consumer protect and boost competition, will become binding across the 31 member states of the European Economic Area (EEA) from January 2018.

Ahead of that, earlier this week leading fund groups that include AXA, Aberdeen and BlackRock indicated that they would absorb the costs of all investment research themselves, possibly prompting Schroders to announcement today that they would follow suit.

The asset manager had previously held the position that, while they would bear the costs for research relating to quantitative equity and fixed income products, they would pass on the costs for research that related to retail equity finds.

That position has now been abandoned, and Schroders indicated that they might even go further by looking at extending the policy to countries in jurisdictions outside the EEA.

Schroders chief executive Peter Harrison (pictured above) said: “While we have met the main research principles of MiFID II for a number of years, we have concluded that we should absorb the cost of research.”

The 31 states of the EEA are the 28 member states of the EU (currently including the UK, pre-Brexit), plus Iceland, Norway and Liechtenstein. 

Union, Allianz, Deutsche, AXA

As reported on International Investment’s sister title InvestmentEurope Union Investment has also confirmed that it will take on the costs of external research to funds, rather than charging its clients, the group released.

The announcement comes as some , including Allianz Global Investors, Deutsche Asset Management and and AXA IM announced that they will take external research costs on their own books.

Eugene Costello
Eugene Costello has been a journalist for some 20 years, and has written for a wide variety of UK and international newspapers and magazines.

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