Allianz joins growing list of firms to shoulder Mifid research costs

Added 5th September 2017

Allianz Global Investors has become the latest asset manager to reveal it will take on the cost of external research once Mifid II rules come into force early next year.

Allianz joins growing list of firms to shoulder Mifid research costs

The company confirmed it will absorb the cost of research for funds and client accounts rather than pass it on to clients in the form of a fee or additional charge.

Mifid II gives firms the choice to pass the cost of research and analysis bought from brokers or banks on or cover it themselves.

Global chief investment officer for equities at Allianz, Steve Berexa, said the solution was “obvious” as the majority of its research was already conducted in-house.

“Intensive research is an integral part of our proposition as an active manager making it natural that they are borne by us and implicit in our management fee,” he said.

The new rules mean from January 2018, firms selling research will have to invoice separately for the work they do for clients and the industry has been split over how best to confront the issue.

On Tuesday, French asset manager Carmignac, with €61bn AUM, joined the few firms to say it will pass research costs on to its clients.

It joined only a handful of groups such as Schroders, Janus Henderson and Man Group which have also said they will not shoulder the burden of research costs.

Most asset managers so far, including Baillie Gifford, Evenlode, Hermes, Standard Aberdeen and Woodford Investment Management have confirmed they will front the costs themselves.

Berexa said taking on the additional cost was “in the spirit” of the new regulation.

"Within the framework of our global business model, which benefits from a globally integrated investment platform where research and investment ideas are shared, we have determined that the efficient and best-suited solution for all parties involved is to assume external research costs ourselves.

"It is also in the spirit of Mifid II, which aims to avoid conflicts of interest in securities trading,” he said.

The decision applies to all Allianz’s funds registered and managed in Europe.

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Louise Hill

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Louise joined Portfolio Adviser in December 2016 as one of the editorial team’s news reporters based in London. Originally from Liverpool, she is an NCTJ-qualified journalist and began her career in 2014 working on local newspapers.



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