Many providers still use a “price taking” approach that lets the buy side determine prices. Some charge fees by the hour or project.
Independents vs Investment Banks
Independent research providers have urged regulators to crack down on “predatory pricing” from investment banks. The survey shows banks charge a median subscription fee of $14,000, compared with $30,500 for independent shops. Still, banks got bigger checks from clients across a broader range of services: their median maximum payment stands at $300,000 per client, double that for independents. Under MiFID II, many banks are using cheap research reports to lure clients to pricier services, Bragg said.
Payment Method
Median responses show 60 percent of research revenue was paid in cash, 30 percent in commission sharing agreements and 10 percent from directed commissions.
Special Extras
How much does it cost to talk to an analyst? Anything from $100 to $5,000 per hour. For events, it’s $100 to $100,000.
Research Types
On the cheaper end, there’s technical and macro research. On the high end, there’s quantitative research and alternative data. Those charging for their macroeconomic insights might be at a disadvantage because MiFID II allows free research as long as it’s publicly available, and many European banks have chosen to give away macro reports for free, according to Integrity.
This article provided by Bloomberg News.