Integrity Research launched its fourth annual research pricing survey, which has become one of the most definitive studies of investment research fees. Over 160 firms participated in our previous study, which polled research providers on fees charged for research services. Over 40% of the participants were investment banks, which participated for the first time in recognition of MiFID II’s demands for more explicit pricing of research services.
Targeted to research providers serving the buy-side, including independents, brokers and investment banks, the survey is invitation only. A link to the survey can be requested by contacting firstname.lastname@example.org. Participants in the survey receive the survey results, allowing contributors to benchmark their fees relative to other firms.
Survey responses are confidential and data from the research is reported only in the aggregate. The survey information is coded by the third party survey provider administering the questionnaire (QuestionPro.com based in Seattle, Washington) and remains anonymous. The survey contains 20 questions, and the average time to complete is under 15 minutes. Partially completed surveys can be saved for completion later.
Because the survey is anonymous, participants in the survey are requested to notify Integrity upon completion of the survey by sending an email to email@example.com with the subject: Research Pricing Survey to be added to the list to receive the survey results. Survey participants need to include a key word provided on completion of the survey.
“We had an excellent response last year, as brokers and banks focused more on establishing fees for research,” said Integrity founder Mike Mayhew. “Now everyone is keen to benchmark their fees relative to others, so we expect even better participation this year.”
The current survey will be Integrity’s first since MiFID II went into effect. Previous research pricing surveys found that that research providers who mainly rely on asset managers to set values for research generally fared better than research providers with explicit pricing for research. However, MiFID II mandated brokers in Europe to assign a priori fees to research services. In the event, many brokers initiated subscription fees for access to written research, while charging for high touch services such as analyst access ex post. The current survey is expected to provide insights on how research fees have evolved post-MiFID II.
In previous surveys, top-tier independents held their own when compared with larger investment banks in the average research-related payments they received from buy-side clients. However, research payments between independents and investment banks reflected differences in payment process, as independents received the majority of payments in cash or through commission sharing agreements. This is another aspect changed by MiFID II, as cash payments, either sourced from research payment accounts or from the P&L, became the only allowed mechanism for research payments in Europe. The current survey will provide feedback on multiple dimensions pertaining to research pricing, not just payment levels but payment mechanisms, fee structures, minimum and maximum payments and more.