Economics
Research Analysts' Existential Crisis Enters MiFID II Era
- Analyst headcount falls as EU rules put price on research
- Merian’s Buxton says quality of research is deteriorating
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Fewer client calls, more red tape and an ever greater pressure to pen attention-grabbing research: These are some of the ways the life of an analyst has changed in Europe since the implementation of new financial regulations.
The revised Markets in Financial Instruments Directive, which took effect a year ago, crystallized a longstanding existential crisis for research analysts. By forcing investors to unbundle trading fees and research costs, the rules put a price on analysts’ ramblings, models, ratings, private briefings and the like. Work that used to be effectively subsidized by trading commissions and relationships with corporate clients now has to be judged -- and priced -- on its own merits.