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4 out of 5 money managers plan to unbundle commissions, survey shows

Eighty-two percent of North American-based money managers surveyed by Investment Technology Group plan to fully unbundle their trading commissions and investment research payments globally as a result of new European Commission rules in 2018.

The high percentage of managers who plan to unbundle comes despite only 43% of those managers saying that the EC’s Markets in Financial Instruments Directive II, which will require unbundling, will have a direct impact on them, ITG said in a news release Thursday about the survey.

Twenty-eight percent of managers said they would not be impacted by MiFID II, and 29% weren’t sure.

MiFID II rules, which go into effect Jan. 3, 2018, will apply to money managers with operations in the European Union, including those who are based outside the EU, and will also apply to non-EU managers who subadvise for EU-based managers. Those impacted firms that want to continue to pay for research along with executions will be required to set up a research payment account.

Also, 59% of those surveyed plan to continue paying for research using commission sharing arrangements; 33% expect to use a combination of both commission sharing and research payment accounts; and 8% plan to set up a new research payment account ahead of the MiFID II start date.

The survey of 100 money management officials, whose firms had an average of $47 billion in assets under management, was conducted during an ITG webinar Dec. 15.