T. Rowe Price to pay for research ahead of MiFID II

T. Rowe Price follows JP Morgan Asset Management and Vanguard in its decision to absorb the costs of research.

T. Rowe Price is the latest firm to confirm it will pay for external, third-party research ahead of MiFID II’s unbundling requirements.

Rob Sharps, co-head of global equity and Group chief investment officer, explained in a statement the asset manager is ‘well-known’ for its internal global research platform.

“In recent years, we have continued to invest in our alpha-generating capabilities around the globe by adding analysts focused on fundamental research, quantitative research, corporate governance, socially responsible investing, and corporate access. 

“The supplemental third-party research we receive complements our own proprietary research,” he said.

Sharps added the decision to absorb the costs of research was made in clients’ best interests, while preserving its investment process and access to ‘important’ third-party research.

T. Rowe Price follows JP Morgan Asset Management and Vanguard, which also confirmed costs of research would be paid for by the business rather than by client accounts.

Under MiFID II buy-side firms will no longer be able to receive research paid for through execution commissions or commission sharing agreements, with regulators believing research is being used as an inducement by brokers and is not providing asset managers with value for money.

Deutsche Asset Management recently created its own internal research division in a bid to control its research costs come January 2018.

The research unit will aim to help fund managers identify investment opportunities and provide clients with regular analysis on macro-economic developments.

Last month, Barclays became one of the first investment banks to put a price on its research, through a tired structure costing anywhere between £30,000 and £350,000.

«