The asset manager was among a handful of firms to have not revealed whether its clients would face extra costs and charges for research from 2018 onwards, but confirmed this morning it will take on the extra cost itself.
However, the firm said the estimated cost of between £1m and £1.5m would be “offset in part by a reduction in remuneration expense”, meaning the net impact on profit would be between £0.7m and £1.1m a year.
There are not expected to be any job losses as a result of the changes, River and Mercantile confirmed.
James Barham, head of asset management at River and Mercantile, stressed the importance of external research to its investment process in a statement today.
“External sourced research, alongside the proprietary developed screening tool ‘MoneyPenny’ and the internal research teams, forms a critical part of this investment process and acts to validate our extensive internal research outcomes,” he said.
Barham added: “Historically, the external cost of research has been part of the total cost of investment reported to clients and has been segregated and budgeted by provider. Under Mifid II we will continue to manage and monitor external research providers in a similar manner.
“However, after a period of consultation with our clients we have decided that, effective from January 2018, the cost of this external research previously charged to clients will be absorbed by the group.”
