GSAM Latest Manager To Absorb Research Costs Under MiFID II

Oct 2 2017 | 9:45pm ET

Global investment management giant Goldman Sachs Asset Management has joined the growing number of buyside firms that have decided to absorb the costs of sell-side and independent research used by its European investment managers once the EU’s MiFID II rules go into effect in January 2018.

MiFID II requires investment managers to pay hard dollars for research and corporate access services provided by broker-dealers and third-party providers instead of bundling them with commissions. 

The new regulations offer three alternatives for how firms can account for the payment of these new costs, including paying for them from their own P&Ls – the option chosen by the majority of buyside firms, including AXA IM, Unigestion, BlackRock, Deutsche Asset Management, Vanguard, T. Rowe Price, Schroders, Janus Henderson and JP Morgan Asset Management.  

GSAM’s fund arm manages a colossal $1.4 trillion in assets, according to Reuters data, making it one of the largest institutional investors to decide it would rather underwrite the costs of external research instead of passing them on to clients. Other asset managers who have yet to publicly disclose their plans for MiFID II research costs include Credit Suisse, Morgan Stanley, State Street Global Advisors and UBS, while those whose clients will be footing the bill include Amundi, BNP Paribas, and Man Group. 


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