Fidelity International will fully absorb external research costs altering its initial decision to charge for research, the firm has announced.
The new Fidelity-funded research model was implemented on 3 January and applies to every client account regardless of investment vehicle, client type or geographic location.
Fidelity's Paras Anand, CIO equities, Europe, said the initial decision to charge clients for external research was made in order to treat all clients equally regardless of their connection to MiFID II regulations.
‘The overwhelming industry consensus has been to not embrace the research payment account model which in turn means our clients, in most cases, would face disproportionate operational and reporting consequences were we to retain this approach,’ he added.
This follows the firm's decision in October 2017 to move from a traditional fee model for its active equity range to a performance-related variable management fee model.
Further details about how this switch would actually operate were released in November of last year.
Fidelity said the variable management fee share classes, which factor in headline reduction in the baseline annual management fee of 0.10%, are already in action.
Commenting on the variable management fee introduction at the time fund selector Paulo Gonçalves of Popular Gestao de Activos said Fidelity’s success in asset gathering would dictate whether fund houses follow suit.
‘I will only encourage other companies to do the same if I reach to the conclusion that this time the move is really positive for the investors,’ he added.