How will the MiFID ll roll-out impact fund marketers?

Words by Nick Laurance, Finance Content Strategist, Incisive Works


MiFID II, the EU-wide set of rules introduced to strengthen the financial markets in response to the 2008 crisis, is finally here. The rules went into effect on January 3rd.

As part of the directive, advisers now have to give annual updates about their fees and fund managers are required to pay investment banks and brokers directly for analyst research, rather than bundling it in with trading commission.

There are implications for asset management marketers, too.

The FCA handbook defines a financial promotion as an “invitation or inducement to engage in investment activity.” In other words, it covers anything that promotes your brand or your firm’s products, and any communication that invites or attempts to persuade customers to buy the products you market.

The directive itself focuses on two main areas of investment communication:

1) The content of financial promotions and marketing material

2) The disclosure of fees and charges to clients


Enhancing transparency

As point two above notes, the requirements on fees and charges places a new demand on firms. This will apply not just to sales materials, but to ongoing communications throughout the client relationship. In short, marketers will have to communicate with clients what positions their companies have taken on charges (for example, research costs) and cope with clients’ reactions.

Speaking at a panel discussion last year hosted by The Financial Services Forum (FSF), Simon Ellis, global head of client segments at HSBC Global Asset Management, said that transparency in communications will take on greater importance in this environment. Indeed, assets managers are likely to enter into an “arms race in tech-savvy client communications.” He added that it is important for fund groups to “to arrive at a single target market definition that can be used throughout the value chain from product makers to distributors.

The fact that research will need to be accounted for will have implications for content marketing. Under MiFID II, “companies will need to focus on distinguishing research from content provided for marketing”, said Courtney Waterman, another panellist at the FSF event and head of EMEA marketing and digital at Schroders.

Of course, the impact of MiFID II will vary considerably across firms and will depend on a number of factors. But marketers should take the lead in understanding the regulatory framework and especially in communicating the implications with clients.