• JP Morgan and Morgan Stanley maintain the top two positions with Jefferies rising up to third place overall
  • Further shifts in the top 20 league table expected as a result of regulatory uncertainty in the UK and US

London, 15 May 2023: Substantive Research, the research discovery and research spend analytics provider for the buy-side, today published headline conclusions on the current state of broker research pricing, supply and market share. 

The messages are clear – investment in senior analyst teams is paying off for investment research providers. This is especially important as regulatory uncertainty in the US and the UK is expected to lead to further shifts in the research provider landscape.


MiFID II’s implementation in 2018 increased the focus on the value and cost of research, and a steady decline in research pricing has followed since then, alongside brokers downsizing their analyst teams on both sides of the Atlantic. However, certain brokers have now bucked this trend and attracted stronger revenues and greater market share, rising significantly higher in Substantive Research’s top 20 broker league table by share of research payments.

In November 2021, Substantive Research’s mapping of the changing market share in investment research showed that Expert Networks had entered the top 20, while Morgan Stanley, JP Morgan and UBS had all retained their positions as the top three, in terms of commanding research budget spend. Then, in April 2022, Substantive Research found that bulge-bracket providers of research had reasserted dominance in the market, gaining market share as market and geopolitical turmoil ensured that the buy-side relied even more heavily on their core brokers.

Substantive Research’s latest findings

Substantive Research’s data shows that brokers who ‘doubled down’ on hiring and retention of key analysts are reaping the rewards and share of wallet and of voice increase accordingly. Jefferies’ performance in this last year illustrates the trend:

  • JP Morgan and Morgan Stanley maintain the top two positions in Substantive Research’s top 20.
  • Jefferies is the provider which has captured the most market share in 2022, rising to third place in the market, having been in 7th place in 2021.
  • This is a direct result of investing in hiring and retaining skilled research analysts at a time when the market in general saw a post-MiFID II price deflation and a move towards juniorisation of research.
  • Although Jefferies’s analyst teams have shrunk somewhat post MiFID II, in proportionate terms, the net experience lost between 2019 – H1 2022 was 70% lower than the top ten providers, and 80% lower than their peers in the top five.
  • What’s more, where Jefferies did lose experienced analysts, they replaced them with targeted, highly ranked analysts in order to maintain the quality of the research product.

Mike Carrodus, CEO of Substantive Research, said: “At the top of the league table, the battle between providers is much more open than it has been for years, and bulge-bracket commitment to their research products will be tested this year. Outside of the top ten, there are many high quality, niche providers that will likely be impacted in future, as their ability to subsidise investment in both people and regulatory challenges is limited.”

Looking ahead: the regulatory landscape is changing

Research regulation in the US, Europe and the UK is gripped by more uncertainty – MiFID II’s research unbundling reforms will probably be softened but it is impossible to predict by how much, and to gauge what effect on actual payments this will have. 

  • The UK’s Investment Research Review will be completed in June 2023 and there has been reference to potential rebundling when it was launched this March. 
  • In the EU, the imminent Listing Act is likely to include flexibility to rebundle research and execution under certain conditions.
  • In the US, the SEC’s no action relief that has been in place since 2018, which allowed cash research payments from Europe to the US to accommodate for MiFID II, will be allowed to expire and this has thrown the market into chaos. US brokers do not know how they will be able to accept payments from European clients after July 3rd 2023. Previous Substantive Research data indicates that brokers are taking different approaches to these challenges. Some will allow their clients to pay through their European offices for research consumed globally, others are registering as Investment Advisors (or deciding to create the infrastructure for their existing RIA to charge for research) in order to continue to take cash payments for research.  But with time running out before the lapsing of the SEC’s ‘no-action’ letter, a Substantive Research study showed in February 2023 that the market still had not identified a consensus way forward for research providers. 

Mike Carrodus, CEO of Substantive, concluded: “Market share in investment research will change rapidly again in the second half of this year, driven by regulatory confusion that will not resolve in the short term. In addition to the churn driven by price deflation and appetite for investment by brokers, there will now be a “regulatory premium” for brokers who have come up with solutions to address payment challenges from the regulatory misalignment between North America and Europe. Brokers will need to be “have-to-have” and also establish an appropriate payment solution in order to not lose out.” 

“As always, these problems also provide opportunities for firms who can invest, innovate and take market share. Despite price deflation overall, brokers that have invested in talent have risen to the top of the market – add to that, a solution in place to counter regulatory gridlock, and those firms will continue their ascent. ”

Learn more about our RESEARCH SPEND ANALYTICS solution and find out how we are helping 100+ firms optimise their research budgets.