Mifid II  

Schroders, Henderson and Invesco U-turn on Mifid plans

Schroders, Henderson and Invesco U-turn on Mifid plans

Schroders, Janus Henderson and Invesco have reversed plans to charge investors for external investment research post-Mifid II, with all three saying they will now absorb all costs instead.

Schroders said earlier this year it intended to stick with existing practices for its fund range, under which retail equity funds allocate charges for external research to clients, while costs relating to fixed income and quantitative equity products are absorbed by the business. Invesco said around the same time that its intentions were also to charge investors for research.

Janus Henderson had said it would pass charges on to clients. Just weeks ago, co-chief executive Andrew Formica said the asset manager did not intend to abandon its decision to charge end investors for research.

"There's a lot of talk about other companies...some competitors came out with the decision they will [not pass on costs to clients]," he told analysts when discussing the firm's half-year results. "We continue to adopt our system. We don't intend to change the position we have."

However, following another raft of rival fund groups deciding to absorb all costs once Mifid II comes into force next January, the three fund firms have today (September 15) changed tack.

Schroders chief executive Peter Harrison said: "While we have met the main research principles of Mifid II for a number of years, we have concluded that we should absorb the cost of research."

Mr Harrison had previously said he felt the firm's stance was "in the right place" given its investment into internal research capabilities.

An Invesco spokesman said today: “We are committed to ensuring our investment professionals have access to the external research market, which is critical to decision-making and delivering the long term investment excellence our clients have come to expect from Invesco."

Invesco said in March its "preferred approach" would be to charge clients, though it subsequently maintained it had made no final decision.

This week fund groups including BlackRock, Aberdeen Standard Investments and Axa Investment Managers joined others, such as Vanguard, in saying they would pay for research costs themselves.