Greenwich Associates study finds a reduction in equity research budgets across Europe and the UK under MiFID II has already caused a decline in the market.
Greenwich Associates already suggest that European fund managers have cut external research budgets by 20% for 2018 and there are predictions that buy-side firms will prefer to deal only with a few market leaders when they trade.
Greenwich Associates said that although investment managers had indicated they would economise on research the “aggressive budget cutting” is more than expected.
A study by Greenwich Associates estimates that the research budget may drop by 20% this year.
While only 9% of US respondents are electing to be MiFID II-compliant, that percentage could grow in the coming year,” said Will Llamas.
“Over the last two years, European investment managers have clearly expressed their intention to reduce equity research spend,” said William Llamas.
The European equity research market has shrunk by $300 million per year in the aftermath of new rules on the payments for investment research, shows a study by Greenwich Associates.
According to US consulting firm Greenwich Associates, the decline in spending is largely driven by a more selective approach to buying research from a smaller number of banks.
Kevin McPartland said that one of the top 10 trends for this year is that “data matters more than trading.”
Kevin McPartland outlines the 10 trends that'll define markets in 2018. It will be the year in which digital descends upon the markets and banks pay more attention to crypto, data becomes more important, and more regulatory changes.
