Investment Research Unbundling: Implications for the Buy-Side

Aite Group analysis shows overall investment management research spending will decline as transparency and innovation usher in increased competition.

Boston, June 15, 2017 — The latest Aite Group report, Investment Research Unbundling: Implications for the Buy-Side, shows why the unbundling of investment research from execution payments has been one of the most contentious legislative standards set out under the European Union’s revised Markets in Financial Instruments Directive (MiFID II). Though unbundling may seem like nothing more than a process formality, its implications for the industry are profound and could have global repercussions. Buy-side firms will now be faced with having to pay for something that they had traditionally received without an explicit price. 

“The European Commission’s MiFID II will raise the bar for financial services firms even higher,” says Aite Group analyst Gabriel Wang. “Most firms are not organizationally structured to manage such a detailed and prescriptive set of rule changes and upgrades on a global basis, and as a consequence, many are being forced to rethink their businesses,” he says.

This report is the first in a two-part series that looks at the latest call for unbundling in the European Union and the impacts for the investment-research industry and across buy-side firms. It is based on Q1 2017 Aite Group interviews with global and regional investment managers, brokers, independent research providers, and vendors to understand their perspectives and insights on the pending MiFID II regulation. 

 

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Aite Group is a global research and advisory firm delivering comprehensive, actionable advice on business, technology, and regulatory issues and their impact on the financial services industry. With expertise in banking, payments, insurance, wealth management, and the capital markets, we guide financial institutions, technology providers, and consulting firms worldwide. We partner with our clients, revealing their blind spots and delivering insights to make their businesses smarter and stronger. Visit us on the web and connect with us on Twitter and LinkedIn.

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