- Despite static buy side budgets, bulge bracket banks increase their pricing and market share across the board in H1 2025
- JP Morgan retains market share top spot; Jefferies retains second place and UBS rounds out the top 3
- Data shows that post-MiFID research valuation processes are robust – rising AUMs do not automatically increase research spend
Substantive Research, the research and market data discovery and pricing analytics provider, today publishes the findings of its latest survey into investment research pricing and consumption, highlighting how research spending has evolved in the first half of 2025.
In terms of research payment rankings, JP Morgan maintains its top spot, with Jefferies maintaining its second place, and UBS returning to the top 3 for the first time since 2022, after some strong growth in client research payments across the universe surveyed. Up until recently, market share gains by brokers have been a direct result of investing in hiring and retaining skilled research analysts, against a backdrop of post-MiFID II price deflation and the accompanying sell side analyst ‘brain drain’. However, in this latest cycle it’s clear that with resourcing having stabilised, it’s the firms that drive interactions (analyst meetings, corporate access engagements etc.) that now win increased market share in this post-MiFID II environment.
2025 Study Findings
Overall, the study makes it clear that Assets Under Management (AUM) growth is no longer an automatic driver for higher research budgets. The real drivers for increased investment research spend are new requirements for analyst coverage or rising buy side headcount. However, even with new headcount, the research budget increases can still be small, as most full service agreements with the bulge bracket firms will cover a portion of the increased need for access.
This should all give comfort to European end investors as they react to many of their asset managers’ intentions to adopt Commission Sharing Agreements (CSAs) in Europe and return to client-funded budgets in 2026. End investors should be reassured that there are now rigorous, well-governed processes in place that ensure any payments for research deliver identifiable value.
The survey shows that in H1 2025:
- Research budgets stayed largely flat in monetary terms (-0.2%) but have decreased in both the US and Europe when measured as basis points of AUM, due to increased average AUM levels. On this basis the survey reflects a decrease of 3% in the US and 1.4% in the UK/EU respectively).
- Buy side spend continues to concentrate with the top brokers - the top 10 brokers now command 55.1% of investment research budgets.
- Top brokers continue to exercise pricing power - In tough market conditions for research, bulge bracket providers still increased their pricing by 1.5% on average, while specialist research-driven brokers decreased 0.5%. This either suggests that the bulge’s reinvestment into their research product is driving increased consumption of analyst meetings, or that asset managers are valuing holistic sell side relationships over the specific value provided by research alone.
A July 2025 Substantive Research client survey charted the buy side’s appetite to take advantage of the softening of MiFID II rules by UK/EU regulators. 87% of respondents at the time said that within two years at least half of investment research budgets in Europe will be client-funded, representing an enormous shift from a previously sceptical asset management community.
Mike Carrodus, CEO of Substantive Research, said: “Average AUMs have gone up - pre-MiFID II that would have meant that research spending automatically went up to coincide - that’s not the case now. If you’re a European pension fund faced with the return of research charges from your asset managers next year, you can be confident that payments to brokers will only go up if new costs added new coverage or delivered new insights that contribute to performance.”
He added: “However this also points to the issue which motivated the UK’s Treasury and the FCA to roll back research rules. In Europe there is a lack of new investment in research, at a time when new data sources and technology are rapidly being adopted in other regions. Maybe we needed to go through this rollercoaster, with regulations going too far and then retrenching in order to achieve a happy medium. European asset managers could now have the flexibility to buy new research, balanced with a mandatory focus on ensuring value for their end investors. Will brokers prioritise the clients that have moved to a funding structure that potentially unlocks more money for them? No guarantees – but the current messaging from the sell side points to a two-tier market of research consumers in 2026”.
Universe of firms covered by the research:
- 44 of the largest asset managers surveyed
- AUM : > $18 Trillion
- Geographic split: 30% N. America, 20% EU, 50% UK
