JO Hambro To Absorb MiFID II Research Costs As Deadline Nears

Aug 30 2017 | 9:08pm ET

Global asset management boutique JO Hambro Capital Management has become the latest European asset manager to announce it would absorb the costs associated with external research under the EU’s new MiFID II regulations. 

MiFID II requires brokerage firms and third party providers to charge hard dollars for research products and corporate access services, ending the widespread practice of bundling such materials into commission costs. The new rules come into effect on January 3, 2018.

A large number of investment management companies, including Vanguard, T. Rowe Price, Unigestion and JP Morgan Asset Management, have opted to pay the fees themselves instead of passing them onto clients. 

"As a high conviction active fund manager, our proprietary research is key to delivering investment outperformance for our clients, but we also value access to selected research generated by external parties,” explained Ken Lambden, JO Hambro Group CEO, in a Citywire article. “The new MiFID II regulations increase the level of transparency around the cost of research services, and we feel that under these regulations, the direct payment of this cost is in the best interests of our clients.”

JO Hambro estimates the annual cost of external research to run around £5 million. Sell side firms and research houses are rapidly trying to develop pricing models for their products, with some developing pricing tiers depending on the type, detail and frequency of the research provided. 

Headquartered in London, JO Hambro manages $37.9 billion in assets across a range of equity funds and segregated portfolios, with expertise in UK, US, European, Asia ex Japan, Japanese, Global/International and Emerging Markets equities. Including a new global multi-asset income strategy, the firm offers 23 investment strategies.

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