Vanguard Investment Management announced to the financial times over the weekend that it will absorb external research costs under the new Mifid II “research unbundling” rules. Making many of its undecided competitors like Blackrock look even less prepared for the upcoming mifid deadlines.
So once the deadline hits Vanguard will essentially stop charging investors for external research provided by banks and brokerages brokerages.
According to Mifid II rules investment firms like Vanguard can absorb analyst research costs themselves or pass it on to investors via a research payment account.
FRathbones, Jupiter, M&G and Aberdeen, to name a few, have all announced they will not be transferring research costs onto the end investor.
As banal as the decision might be it needs to be taken in the wider context of an industry stuck in a world of indecision. With a number of Vanguards competitors still not giving any indication on whether they will pass on the costs or absorb them. Most notebly Franklin Templeton, JP Morgan Asset Management, Fidelity International and Columbia Threadneedle, still have the jury out on a decision a decision.