“Dashboard wars” as Mifid drives new research methods

In response to Mifid II and the delegated acts, Hayley McDowell investigates the recent explosion of ‘dashboard’ launches in research…

Buy-side demand for increasingly sophisticated distribution methods for research in response to Mifid II is leading to an explosion of dashboard launches.

The use of PDF and email distribution for research has become unpalatable to buy-siders as firms prepare for the onset of Mifid II rules, according to a new poll from BCA Research.

Brijesh Malkan, corporate development director at BCA Research, explained that instead of distributing reports or research by emails, fund firms are now preferring “dashboards and interactive charting”.

He explained: “Managers are demanding more deconstructed and personalised research with sophisticated tools such as semantic search and interactive charting to integrate research into existing workflows.”

This method of distribution can be useful for the consumption of research, which is considered an issue for many firms who struggle to keep up with research volumes.

Pedro Fernandes, co-founder at research platform ResearchPool, explained that research firms have had to find a “better user experience”, and PDF or email distribution simply doesn’t provide this.

He said: “There will be more focus in servicing the buy-side, and research providers and platforms need to provide a better user experience.”

The average asset management firm is emailed 2-3 million research reports in PDF format every year, but only 5% of these reports are actually read, according to research from COO Connect.

Vicky Sanders, co-founder of marketplace for institutional research RSRCHXchange, agreed that a digital shift in distribution is imminent.

She said: “The way research has been distributed hasn’t changed much since the fax machine. Distribution has been relatively untouched by technology, but regulation is driving this change.”

Sanders added: “Under Mifid II, research distribution is shifting and managers are beginning to receive research in a more interactive format.”

The Mifid II delegated acts were released earlier this month, revealed an unexpected increased administrative burden for firms, which left industry participants scratching their heads with confusion.

Following the release of the delegated acts RSRCHXchange announced the addition of a dashboard to its research platform, which the firm says is compliant with the rules outlined in the acts.

Sanders said the dashboard is “an essential tool” and that “a deep understanding and auditable overview of what research they actually use for their investment decisions is now an essential business and regulatory requirement.”

Fund managers are expecting more from research and research providers as Mifid II comes into effect.

BCA’s Malkan added: “Managers are no longer willing to accept the siloed and waterfront model for investment research, where bottom-up research analysts have limited exposure or analysis of the macro/geopolitical space within their framework.

“Asset Managers are demanding a consistent, objective and conflict-free framework that connects the dots from macro to mid (sector) and micro (bottom-up) research.”

 

The TRADE will be hosting a series of ‘pop-up’ events throughout Europe designed for buy-side trading firms and their partners to discuss the strategies, systems and working practices necessary to comply with MiFID II.

Click here for more information. 

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