Unigestion joins peers as it stops charging clients for research

 

MiFID II

Unigestion has stopped passing research costs onto clients

Swiss fund house Unigestion will absorb research costs instead of passing them onto clients ahead of the changes which will take place under MiFID II at the start of next year.

The firm said this decision will not result in any change in management fees and will ensure costs and charges remain transparent.

Fiona Frick, CEO of Unigestion, said: “Our clients are at the heart of everything we do and the reasons behind our decision to pay for all research ourselves go beyond regulation.

“It is quite simply the right thing to do to ensure that we continue to give our clients the clearest picture of how and why they are being charged for our products, alongside safeguarding them from any potential conflicts of interest in providing best execution.

“Both our bespoke in-house research and the research provided through external providers are integral to our investment process. We will continue to use them both in tandem to deliver the best possible investment solutions and returns to our clients globally.”

Under MiFID II, which comes into effect on 3 January 2018, rather than charging a variable rate for each piece of research firms will be forced to allocate a research budget.

Asset managers can either pay for the research from their own profit and loss (P&L), recover it by increasing management fees or pass it onto clients directly through a research payment account (RPA) which entails details of additional disclosure, budgeting and reporting.

Unigestion has followed the examples of firms such as M&G Investments, Jupiter Asset Management, Woodford IM and Hermes IM, which have all stopped passing on research costs to clients.

So far Vanguard is the only asset manager to give an estimate of its research costs, predicting they will be under $5m per annum.

About the author

Tom joined Investment Week in August 2016 as an asset management correspondent covering the ETF and commodities beats.

Outside of the office he is a keen cricket, football and boxing fan and runs his own sports website.

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