New Research Valuation Study Shows Divergence Between Fixed Income and Equity Managers


Fixed income-oriented asset managers are reacting differently to the unbundling provisions under MiFID II than equity managers, according to a report released by Integrity Research Associates.  The findings are based on a survey of global asset managers primarily located in Europe and the US, sponsored by, a non-profit consortium dedicated to improving research distribution.

In the Integrity Research report, “Research Value in Post-MiFID II World,” nearly half (49%) of the respondents expected no change in projected research spending for 2018.  However, of those expecting changes, fixed income managers tended to anticipate increased spending whereas equity managers expected decreased spending.

Similar differences emerged in the expectations for allocating research payments.  Fixed income managers were planning to allocate more wallet share to large investment banks at the expense of independent research providers.  In contrast, equity managers were more inclined to shift spending from bulge banks to independents and boutique managers.  Managers not subject to MiFID II expected little change in allocations.

Over one hundred asset management firms (104) participated in the anonymous online survey conducted in September and October 2017, of which European respondents represented 40%.  U.S.-based respondents represented half of respondents.  55% of respondents had assets under management exceeding $10 billion and one quarter managed assets over $100 billion.

60% of the firms participating in the survey were subject to MiFID II, at least in part.  Of the remaining firms, over half planned to become ‘MiFID II Ready’.  The majority of firms partly subject expected to ‘ring fence’ their MiFID II unbundling obligations.

A majority of respondents expected to fund FICC research payments through their P&L but the view on equity research funding was more mixed.

Corporate access and written research were among the most valuable research services and the most valued type of written research was initiation reports. The majority of respondents planned to use interactions data as part of their valuation process.

Our Take

The survey confirms the challenges facing independent macro and fixed income research firms, as asset managers plan to shift more of their research spending to large investment banks and away from independent research firms.

More broadly, the survey suggests that the short-term impact on research spending may not be as grim as many have expected, since nearly half of the respondents expected no change in research payments while fixed income asset managers expect to increase spending.

A large portion of asset managers not subject to MiFID II expected to become ‘MiFID II Ready’, but it was clear that their concept of preparedness differed from those actually subject to the new rules.   However we have been arguing that research valuation and some level of research budgeting will become broadly adopted industry best practices, a view supported by the survey results.


About Author

Sandy Bragg is a principal at Integrity Research Associates. He has over thirty years experience as an investment research professional. Prior to joining Integrity in 2006, he was an Executive Managing Director at Standard & Poors, managing S&P’s equity research business and fund information properties. Sandy has an MBA from New York University and BA from Williams College. Email:

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