2018 was an eventful year for the investment research industry, as reflected in our most-read articles during the year.
MiFID II’s ambitious reforms were an enduring topic. Our analysis of the strengths and weaknesses of MiFID II’s research unbundling provisions was the most widely read article of the year. Also popular were:
- News of French regulators’ recent attack on MiFID II’s research rules;
- a guest article from Substantive Research founder Mike Carrodus discussing how MiFID II might play in the US;
- A guest article from Neil Scarth of Frost Consulting on how MiFID II is favoring US asset managers; and
- Our analysis of MiFID II’s impact on research fees.
Even more influential – in the US at least – has been the rise of alternative data and artificial intelligence. Widely-read articles on the topic included:
- Our recent article on the convergence of alternative data and investment research;
- Schroder Investment Management’s assertion that ignoring alt data would be negligent;
- How changes to Apple’s terms of service for their app store impacted geolocation and app usage data providers;
- A review of JP Morgan’s 2017 study on alternative data; and
- A guest article from Estimize founder Leigh Drogen on how discretionary asset managers are responding to the ‘great quant makeover’.
Other research trends we followed were also popular, including:
- A Q&A with AlphaSights co-founder Max Cartellieri, who forecasted that the expert network industry would grow to $5 billion from our current estimate of $1 billion;
- The rise of research on cryptocurrencies;
- Our forecasts of research industry spending for 2018 (we said that spending would drop 17% in Europe thanks to MiFID II, and decline 9% overall);
- A guest article by Peter Bentley, former head of McLagan’s Performance business, about the transformation of the institutional sales role; and
- Our analysis of the 2018 Extel survey results.
For 2019, the MiFID II focus will shift to the US as we expect some major asset managers to follow MFS’s approach to reimbursing research costs for US clients and the SEC contemplates whether to ease regulatory restrictions on US brokers accepting cash payments for research. Consolidation among alternative data vendors will continue as brokers and major market data players increase their presence. A widely expected bear market in stocks will have significant ramifications, forcing restructuring of many research offerings.