Frost RB is ideally suited to the post-MiFID II research/ESG funding environment.
UK/EU managers have a significant, and possibly fleeting opportunity to return to using client money for research/ESG. These two costs combined can represent up to 25% of UK/EU manager pre-tax profit at a time when margins are under pressure.
But, to take advantage of this regulatory "dividend", managers will have to adjust the common firm-wide document/interaction counting research valuation methodologies that have characterized the MiFID II environment
FrostRB is a simple to use but highly customizable multi-asset class research/valuation software platform. Transcending traditional "broker-vote" systems, FrostRB provides an comprehensive research valuation/reporting framework that generates monetary budgets for research products/services that reflect investment processes and universes of the asset manager, down to the fund level.
Key benefits include:
Ability to generate and aggregate monetary research budgets down to the fund level, eliminating fund cross-subsidization and meeting FCA/MiFID II requirements.
Specific selection and monetary valuation of individual research products.
Harmonization of research pricing (both priced and unpriced products) resulting in ~15% top-line research savings.
Alignment of research budgets with investment strategy and expected returns.
Streamlined workflow. One set of research appraisals can flow down through all of the investment products in which investment professionals have input to create customized fund/strategy level budgets.
Sophisticated, customizable reporting by strategy, fund, research producer etc. to provide granularity of research payments for clients, regulators, internal constituencies.
An asset manager's ability to demonstrate to clients why and where their research commissions have been spent, and how that has supported the agreed investment process will be a critical competitive differentiator as asset owners increasingly benchmark asset manager research spending as an adjunct to Trade Cost Analysis (TCA).
FrostRB Partners with Investars for MiFID II Solutions
London – September 6, 2016
FrostRB (www.frostrb.com ), the multi-asset class Research Valuation/Budgeting platform has announced a technical integration with Investars (www.investars.com) “Insight” research payment/CSA solutions.
The companies will co-operate to provide asset managers with an integrated research valuation/budgeting – commission management solution that can operate at various levels of aggregation down to the fund level.
The granularity of approach is designed to meet the MiFID II requirement that asset managers will have to inform their clients of its specific portion of the manager’s research budget in advance.
“Given that asset owners are not uniformly invested across the product suite of their asset managers, the ability to value research and track both budgets and payments at the fund level creates MiFID II compliant transparency for both parties. Investars' fund level capabilities and robust reporting system, match well with the FrostRB platform”, said Neil Scarth of Frost Consulting.
“The multi-asset class nature of the combined solution addresses a significant MiFID II challenge for asset managers as all asset classes are covered by the research budgeting rules”, said Kei Kianpoor of Investars.
Both companies remain capable of integrating third-party vendors based upon the configuration of asset manager solutions.