On November 19, 2019, the Healthy Markets Association released its ground-breaking Research Practices Questionnaire. The Research Practices Questionnaire is intended to assist asset owners and asset managers in assessing the conflicts of interest and costs attendant with their service providers’ research practices.
By way of background, for more than two decades, investors and their trade associations have called for greater transparency into research usage and costs. Spurred by MiFID II in Europe, the market dynamics for research practices around the world have changed dramatically over the past several years. Some of these changes may benefit investors, such as by increasing transparency and reducing costs. At the same time, investors who are not careful may find themselves subject to even greater risks and costs. For example, US-based pension investors may now be suffering lower returns as a consequence of paying for research that does not benefit them in any way.
This Research Practices Questionnaire, which is really two questionnaires in one, is intended to provide:
asset owners with a short list of questions for their investment advisers that may help them identify and quantify areas of risk; and
investors with a short list of questions for their broker-dealer research providers that may help them identify and quantify opportunities to reduce conflicts of interest and costs.
The Research Practices Questionnaire complements the Healthy Markets Association’s previously released Order Routing Questionnaire and ATS Questionnaire, as well as our public reports on Benchmark-Linking Investing and Better Best Execution.
About Healthy Markets Association
Healthy Markets is a not-for-profit association of institutional investors working together with other market participants to promote data-driven reforms to market structure challenges. Our members, who range from a few billion to hundreds of billions of dollars in assets under management, have come together behind one basic principle: Informed investors and policymakers are essential for healthy capital markets.