5 Key Takeaways from Unbundling Uncovered ‘16:

Panel 2

Increased Attendance: Up to 280 from 210 last year, the conference program was expanded to a full day of six panels from last year’s four. Attendance stayed strong all day with almost 200 present for the final panel covering the detail of RPA Best Practice!

Greater engagement and participation: Whilst the range of buyside and sellside attendees was similar this year, the participation and level of engagement from within these firms was much greater. The greater attendance of buyside compliance and operations teams reflects the implementation stage firms are embarking on. That is, as firms set up their new research procurement processes (valuation, budgeting, payment and client reporting), the number of stakeholders naturally increases. The questions posed to our panels were much more detailed this year, which we think reflects the key question most firms are grappling with currently. Do they continue to charge end-investors for the research, or put that cost onto their P&L? 

More explicit pricing; nothing is for free: Across our various panels of industry experts there was a general push for explicit pricing (from a compliance perspective), plus an increasing realisation that almost all FICC research will need to be priced and paid for. Whilst the minor non-monetary benefits clause seems to open the possibility for some research to be free, asset managers sounded nervous about the prospect of justifying the consumption of free research on a case-by-case basis. Many panelists agreed that Germany and France will be operating under a less strict system than the UK, which will confuse things even more.

Paying for research outside Europe: Many delegates were concerned about the uncertainty over how to pay for sell side broker research in the US, where research and commission payments remain bundled and where US brokers are prohibited from receiving a payment by law. There was some faith that a solution would be found, and differences of opinion of how likely it would come from a “no-action relief” from the SEC.

A new infrastructure fit for purpose: Can spending money on compliance also provide benefits to portfolio managers? Whilst firms will have to understand that the perfect solution isn’t immediately available given the established ways that research is bought and sold, it was clear that almost all the buyside attendees were investigating using new technology providers to get better performance and competitive advantage.

We will be sending out the results from the polls, summaries of each panel and key quotes over the next few days. To be including in the mailing list please email info@substantivereserch.com with “mail” in the subject field and we’ll include you.