Deutsche Asset Management, the €711bn fund arm of the German bank, plans to stop charging investors for analyst research when sweeping new European rules come into force next year.
In a memo to staff, seen by the FT, Nicolas Moreau, head of Deutsche Asset Management and a member of the management board at Deutsche Bank, says: “The decision ensures that our clients will not be burdened with additional costs – and that they can easily and clearly understand the pricing of our funds.”
The German fund house said it would cover the cost of investment research, such as analyst notes, from its own profit and loss account, rather than pass the cost on to its clients.
Fund managers are currently rushing to make a decision about how to pay for research ahead of the new rules, which fall under Europe’s Mifid II directive and are expected to radically transform how banks, brokers and fund managers interact. Under the regulations, asset managers will have to present investors with clear budgets for research, ending the practice of receiving research for free in return for placing trades with banks and brokers.
While some fund houses, such as Schroders and Janus Henderson, announced plans to pass on the cost to clients earlier in the year, in recent weeks most asset managers have opted to cover the cost of research themselves.