- Survey points to a Q2 2026 shift to client-funded research budgets.
- 73% of buyside firms agree that European asset managers face competitive disadvantages vs. US counterparts on two fronts: corporate access and access to investment analysis.
- 69% stated that “Improved research and corporate access validates charges being passed on to asset owner clients”.
Substantive Research, the research and market data discovery and spend analytics provider, today releases the results of a survey of the largest asset management firms’ reactions to the FCA’s new Joint Payments research funding rules, which allowed additional freedoms for how firms subject to MiFID II could pay for investment research and corporate access, meaning that research costs could once again be passed back to end investors, as they were pre-MiFID II.
The survey assesses the benefits to asset managers, as well as their asset owner clients, of embracing a move back to client-funded research budgets.
The latest survey data shows:
- 73% of respondents stated that, in terms of the research (written reports and calls/meetings with sector analysts) they can access in the current P&L funding environment “European asset managers are at a competitive disadvantage compared to their US counterparts”.
- 73% of respondents also stated that, in terms of access to meeting with the corporates they need to meet with to make investment decisions, “European asset managers are at a competitive disadvantage compared to their US counterparts”.
- Accordingly, 69% stated that “Improved research and corporate access validates the charges being passed on to asset owner clients”.
- 80% of respondents stated that “Performance is what really matters, and if budgets increase slightly but have a leveraged effect on performance, then asset owners reap the rewards.”
- 59% of respondents also stated that adopting a joint payments approach could “lead to increased buyside flexibility for asset managers to invest in any future developments/offerings in the research space”.
- This is particularly significant as the average medium size UK/EU asset manager spends $700,000 a year less than their American peers on technology-driven research tooling and analytics.
This latest survey builds on Substantive Research’s July 2025 survey, covering the market’s expectations for how the industry would respond to these new freedoms. The July 2025 survey found that 87% of respondents predicted that at least half of all research budgets will become client-funded within the next two years.
But for the buy side in the UK and EU to switch to client-funded research during 2026, there needs to be conviction that adding of a couple of basis points to clients’ trading commissions would be heavily outweighed by the potential benefits for their end investor clients paying for them, in terms of performance and risk management.
Mike Carrodus, CEO of Substantive Research said: “Anything that impacts what the client pays is obviously sensitive. However, this is an important issue that merits debate now that the regulators in the UK and the EU have softened the rules. Do investors think a small added cost to the commissions they pay is worth ensuring that their asset managers can access research and crucially, research-related tech, more flexibly throughout the economic cycle? Judging by the results of this survey, the buy side believes that moving to joint payments can reverse MiFID II’s damage to their global competitiveness and dramatically improve their ability to access research and meet with corporates.”
He added: “North America is very happy using client commissions to pay for research and has not followed the MIFID II route - there’s an assumption that asset owners and asset managers are aligned to ensure portfolio managers get access to their research they need. European asset managers would like to realign with that model and believe that this would create the best outcomes for European end investors. MiFID II ensured that there are rigorous research valuation and procurement processes in place, so maybe now is the right time to prioritise performance outcomes once again, over marginal cost. The combination of insights from our recent Unbundling Uncovered conference on November 5th, plus these survey results, point to the wave of moves beginning in Q2 2026 and gathering pace through to the beginning of 2027.”
Rachel Kent, Financial Regulators Complaints Commissioner, and author of the UK Investment Research Review, said: “As part of the government’s efforts to boost growth in UK capital markets, pension schemes are being encouraged to invest in UK-based growth companies to enhance financial outcomes for pension savers. The Joint Payment Option is a way of helping to achieve this as it supports the facilitation of further investment research coverage, thereby providing investors with the information they need to assess a company’s value as an investment. Understandably some asset managers are yet to take the leap, owing to frictions such as the time it takes to operationalise the change or concerns over investor reaction, but the prize of greater growth for investors and boosting investment in UK capital markets means it is worth the effort. Going forward, it would be helpful in forthcoming consultations and policy discussions if the government and regulators could provide positive support to this growth initiative by supporting those asset managers who wish to take up the payment flexibility offered by the Joint Payment Option.”
Steve East, Global Head of Equities of Rothschild & Co Redburn: “We’ve engaged with over 240 UK and EU asset managers on this topic and there is a clear shift in support for a move to joint payments for investment research. MiFID II unintentionally cut research budgets, limiting access to differentiated views and hindering performance. Joint payments is seen as a way to restore flexibility and transparency, enabling high-quality research without the operational burdens of past unbundling rules. Backed by the FCA and ESMA, this initiative strengthens UK and EU capital markets’ global competitiveness at a critical time for the industry. Momentum is clear—major asset managers and dealing desks are preparing CSA agreements. This change ensures better-informed investment decisions and positions UK and EU fund managers to compete on the global stage.”
Background – FCA’s efforts to stimulate the research market post-MiFID II
In July 2024 the FCA released new rules within COBS2 covering segregated mandates, making it easier for asset managers to charge for research alongside trading commissions, as they did pre-MiFID II. CP24/9 showed that the FCA had listened to the buy side’s concerns, and allowed for both strategy or firm-level budgeting for research which was a crucial concession in order to encourage the market to engage and move across. More recently PS25/4 was released in May 2025 which covered pooled funds, which aligned with this approach and removed the last “dealbreakers” according to asset managers.
Universe of firms covered by the research:
- 40 of the largest asset managers surveyed
- AUM : $15 Trillion
- Geographic split: 25% N. America, 25% EU, 50% UK
