More than half of money managers surveyed by trading platforms Liquidnet and Plato Partnership have implemented a global unbundling policy as a result of MiFID II.
Also, an additional 20% of the 55 firms surveyed between August and November said they would create a global policy to unbundle research and execution costs in the next five years, Liquidnet said in a summary of the survey findings.
The changes are the result of rules that were enforced in January under the Markets in Financial Investment Directive II regulations imposed by the European Union that require money managers doing business in Europe to disclose their trading execution and research costs separately.
The survey also showed that 61% of managers have cut the number of research providers they use since January. However, 55% still have more than 50 research providers globally, and 76% access research on small- and mid-cap equities from more than 10 different brokers.
Sixty-nine percent of those surveyed said they use global investment banks for research, but 77% are using alternative sources of research instead of traditional written analysis, and 59% are now investing in quantitative and data scientists to shift research responsibilities to the buy side from sell-side brokers.
"Perhaps the most surprising finding of the study relates to the extent the relationship has changed between buy-side and sell-side over the past year — and will continue to do so moving forward," said Rebecca Healey, head of Europe, Middle East and Africa market structure and strategy at Liquidnet, in an email. "We're already seeing asset managers marry traditional research with insight derived from data analytics. That also means that sell-side services are not going to be used in the same way that they have been in the past, with buy-side firms only selecting services that truly add value."
The 55 firms surveyed have a total of $18.3 trillion in assets under management. Forty percent were based in the U.K., 31% in the EU, 19% in the U.S. and 10% in the Asia-Pacific region.