Fidelity finally absorbs external research costs

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Fidelity International has chosen to absorb fully the cost of external research and will not apply a research charge on any client account, the firm has announced.

This statement reverses Fidelity’s decision to pass external research costs onto clients as outlined by the firm in October 2017 and comes after in-depth conversations with clients and external research providers.

The manager brought research costs in-house since 3 January 2018 as Mifid II rules were entering into force.

Adrian Lowcock, investment director at Architas, commented Fidelity’s decision: “It is good to see fund managers try different approaches to solving the issues facing the industry and Fidelity’s ideas have added value to the whole debate. Most importantly though, Fidelity have listened and responded quickly and clearly to the feedback they have received from their clients. It is good to see that the industry has reached a consensus approach which should make it easier and cheaper to access funds.”

“However, the long term impact of absorbing research costs is still unknown and could result in unforeseen consequences so fund groups, advisers and researchers need to remain vigilant to ensure this approach remains the right one for the industry and its clients.”

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