However, Mr Darbyshire says greater unbundling is "hugely welcome".
"Now the investment banks are to become quasi-independent providers, we'll compare their research offering with our existing providers. We'll take our time making any research-related decisions, we'll compare their research offering with our existing providers."
According to Sarah Lyons, head of marketing at Ascentric, the new rules on disclosing the costs on research unbundling are already driving change in the asset management sector.
She explains: “Some asset management companies are absorbing any external research costs incurred in the management of clients’ assets.
“This can only be a good thing for the investor, as the required transparency is already driving down costs and making it easier for advisers to select investment solutions that offer the best value for their clients.”
Indeed, as Mr Darbyshire adds, 7IM will be "taking our time" making any research-related decisions, "as we expect significant fallout from Mifid, possibly leading to material reductions in pricing, the demise of industry players and the eventual restructuring of the research industry around a new business model".
Moreover, as Richard Janes, spokesman for Brewin Dolphin explains, this transparency will also reassure clients and their advisers there has been “no undue inducement in that regard by their investment manager to use one firm over another".
“They may still end up paying for the research if their firm employs research payment accounts, but it will be clear to them what the cost is and, if the firm pays for research centrally, it could end up in an overall reduction in cost for the client.”
Possible downsides
For SEI Wealth Platform’s Ms Watts, advisers will need to be able to articulate the standalone value that the research may have to the client, and to extrapolate any correlation between research and performance. This is not so easy to do.
She adds: “When a number of providers look the same from a bundled fee comparison, are some actually providing more value to the client by virtue of research quality? Does more, or better, research actually lead to better returns?”
A research document from Marten & Co also highlights the possible detrimental effect on smaller companies in particular.
The research note – Mifid II: less than 96 days – states: “We believe medium and smaller companies will be hit hardest, with coverage for many residing with the corporate broker only, if they continue to offer that service.”
The research also warns that quoted companies may have to commit significantly more resources to investor relations and events to get the message out there, as they may no longer get sell-side assistance with organising roadshows as things unbundle and costs become visible.
