“Setting a price in preparation for MiFID II’s introduction in January will not be the end of this story. It’s
a very dynamic and iterative process and it’s likely to
take three to five years before the market will stabilise
and find its natural price points,” she says.
MiFID II can be seen as creating a completely new
market for a very familiar product. As with any new
market, it will take time for it to find its feet, become
fully competitive and provide pricing that works for
both clients and providers.
It won’t be an easy process for many firms and some
may have to adapt to not having the same service levels
as they previously experienced under the bundled regime. New ways of working may need to be developed
and some firms might consider bringing more of their
research activities in-house.
However, over the long-term,
these changes should result in a
more competitive, accessible and
diverse research market. Specialist
research firms should get more of
a look in, as will freelance analysts,
while banks will need to rationalise
their offerings to make sure they
provide genuine value to clients
and both sides of the Street will
have to take a more conscious
approach to their research costs.
Ultimately, the end investor should
win from all this and ultimately,
that’s what the investment industry
is all about.