Of all the issues addressed by MiFID II in the EU’s securities markets, its impact will be most pronounced in the portfolio management business. The requirements to unbundle payment for investment research from execution services at the firm level, and sales from investment advice at the retail level, will call upon independent asset managers and asset management units within banks to profoundly rethink their business model and adapt to the new requirements. It will make the brokerage market more competitive and may require banks to separate from their asset management business. It will also change the product mix that is offered to retail investors and hopefully will tackle inducements in sales of investment products once and for all.
Karel Lannoo is General Manager of ECMI and Chief Executive of CEPS. Questions related to MiFID implementation were discussed at an ECMI seminar on "Unbundling Investment Research under MiFID II: How to balance price, allocation and quality", 17 January 2018 at CEPS.