Investment banks are in the middle of a big headache over how to handle their equity research divisions. US and European regulations are in direct opposition over research, as the latter is demanding asset managers to pay directly for research, while the US regulatory model favors “soft dollars”, or pay for research via commissions. Therefore, banks have been coming up with their own pricing models for research that is directly bought. A full picture is not entirely clear, but so far, Morgan Stanley is quoting $2,500 per hour for direct meetings with its analysts. To put that in perspective, it is almost double the rate for top lawyers. The firm is also charging around $25,00 per year for basic access to research for a small firm with five users.
FINSUM: Banks have been really aggressive in pricing research at high levels. The thing is, asset managers have a lot of pricing power in this game, so it is probably just a tactic to start the negotiations at a high price point.