Kempen Capital Management has decided to cover external investment research costs itself from 2018 under the new European Union (EU) legislation package of measures for financial markets under MiFID II.
The move comes as the requirements of MiFID II state specific costs incurred for external investment research must be transparent and recognisable as such.
Separate pricing for external investment research, also known as "unbundling", is expected increase transparency in the cost structure, which currently sees trading and research costs lumped together in a single commission paid by the client.
Lars Dijkstra, CIO at Kempen, said: "We welcome any chance to increase transparency and efficiency in the financial sector. Kempen has always invested heavily in both the quality and quantity of our internal research system.
"This makes us less dependent on external research service providers. Obviously, we will continue to work together in future with a group of selected, high-quality suppliers of investment research services."
A number of investment managers have taken the same route in a bid for greater transparency for their clients, including Woodford IM and Jupiter Asset Management.
In April last year, Neil Woodford's firm announced it would absorb research costs on its £10bn Woodford Equity Income fund, rather than charging them to investors as part of a new initiative to be open and transparent on all the costs associated with running an actively-managed fund.
Meanwhile, earlier this year in its annual results, Jupiter Asset Management followed suit by making the decision to pay all research costs through its own accounts.
CEO Maarten Slendebroek said: "When I look a client in the eye, I can now say 'there is no need to worry about the research costs', and it is a good competitive position to be in."
Other houses that have taken the same steps include First State Stewart Asia, which took on the costs of all broker-related research and advisory services from April 2017, and Evenlode for its £1.4bn Evenlode Income fund, which also made the change earlier this year.
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