Implications for research providers and ongoing actions for compliance

In practice, tough negotiations over the cost of investment research are led by Asset Managers, especially by those that had never really paid attention to what they were actually spending on research before.
Driven by the fear that they could be cut out of the Asset Managers’ research providers list, and by the fact that, in some cases, the services provided were overpriced, almost all providers end up accepting a reduction of around 20% of their initial offer based on the current usage (and in a few cases, up to half for those who anticipated fierce negotiations and inflated their initial offer).
Also, in order to adapt to the contractualization of research service providing, research providers need to implement the necessary operational enhancements to monitor usage and payments against agreed budgets as well as the quality of the provided services assessed by consumers to prevent being part of potential future cuts.