Frost Consulting has launched its Frost RB valuation and budgeting software for investment research, designed to help asset managers cope with new research requirements under the Markets in Financial Instruments Directive (MiFID) II.
The product is designed to address new unbundling rules under MiFID II, which will require European asset managers to prove they only pay for research they use, avoiding cross-subsidisation.
Asset managers will also have to inform asset owners of their portion of the research budget in advance.
Frost RB is intended to provide a transparent research valuation, budgeting and reporting framework, generating customised and multi-asset class research budgets, at a fund, rather than firm, level.
It aligns research budgets with fund investment processes, supporting investment objectives of the asset owner, and reducing unnecessary costs and inefficiencies that can mean reduced returns for owners.
According to Frost, asset managers can spend up to $20 billion on clients’ money on external research, per year. Research methods have typically been inefficient and non-transparent, making it difficult to establish a monetary value for individual research projects.
Frost RB allows asset managers to establish a value for these projects, helping asset managers to comply with MiFID II requirements and maximising return-on-investment on research spending.
Neil Scarth, principal of Frost Consulting, said: “The institutional investment research market is at the inflection point of the biggest change since the US Securities and Exchange Act of 1934. We are very excited to be launching FrostRB to help asset managers create, and demonstrate, better investment outcomes for asset owners.”
