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Bailey McCann, Opalesque New York:

When Europe's Markets in Financial Instruments Directive II (MiFID II) proposal was first released, the directive sent shockwaves through the asset management industry. Requirements under MiFID II will force a significant change in how investment research is produced and acquired, as well as how advisers run their business. Now that the deadline for compliance is getting closer, the industry is facing up to just how big of a change is at hand.

A new survey released last week from Investec Wealth & Investment (IW&I), shows that over half of UK investment advisers think they will have to change their business model in order to comply with MiFID II.

In addition to governance and operational changes, new rules will require asset managers to pay directly for investment research instead of getting it as part of a broader relationship with a bank. MiFID II calls on asset managers to dedicate a specific research budget to purchase reports. For many on the buy-side, research budgets are already in place for independent research that funds purchase in addition to what's provided by the big banks. Expanding that budget to include the big banks may seem simple on the surface, but rules in the US limit banks from selling research, creating a murky situation for asset managers that operate in both the US and the EU.

In September, both the UK's Financial Conduct Authority and France's Autorité des Marchés Financiers asked fo......................

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