JO Hambro Capital Management (JOHCM) is the latest firm to act on broker research costs, as a key regulatory deadline approaches and pressure mounts on firms to state their position.
JOHCM said it will absorb its approximately £5 million (€5.3 billion) annual securities research costs paid to external analysts under the new capital markets regime engendered by MiFID II from January next year.
The UK firm’s decision follows a string of announcements recently by large US firms T. Rowe Price, Vanguard and JP Morgan Asset Management, who each said they would also pay for broker research rather than charge clients.
Ken Lambden, group chief executive of JOHCM, said: “The new MiFID II regulations increase the level of transparency around the cost of research services, and we feel that under these regulations the direct payment of this cost is in the best interests of our clients.”
The firm, which has £29.2 billion of assets under management, uses a mix of internal and external research.
So far, several European asset management firms, including Aberdeen Asset Management, Baillie Gifford, Jupiter and M&G, have said they will absorb the cost of research themselves.
Others, such as Amundi, Invesco and Schroders have said they will set up new administrative structures known as research payment accounts, which will monitor fees paid out of investors’ funds.
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