• For asset managers above $150bn AUM, a typical US buy side firm is spending $8.6m more every year than its average European competitor on investment research
• In some instances, US research budgets are five times higher than their European equivalents for firms with similar strategies and sizes
• This explains the urgency from European politicians, regulators and asset managers to encourage a shift to funding research through Commission Sharing Agreements (CSAs)

Substantive Research, the research and market data discovery and pricing analytics provider, publishes the findings of its latest survey into investment research spending and consumption, highlighting how research spending has contrasted between North America and Europe from 2022 to 2025.

UK and EU buy side spending on investment research now significantly lags that of US counterparts, leaving UK and European firms struggling to compete in terms of accessing the investment signals and the corporate access they need to maximise returns to end investors.

This is especially significant against the backdrop of a European asset management industry working through the challenges of returning to Commission Sharing Agreement (CSA)-funded research payments, which is likely to begin in earnest in the second half of 2026 (additional background below). It also highlights why 73% of European asset managers confirmed in a November 2025 Substantive Research survey, that they were “at a competitive disadvantage compared to their US counterparts”.

Substantive Research’s latest survey data shows:

• The average US research budget has recovered by 40 basis points since 2022, while average European budgets have only recovered by 2 basis points
• For asset managers above $150bn in AUM, average annual US research budgets are now $8.6m higher than their UK/EU equivalents
• In some extreme instances, US research budgets are now five times higher than their European equivalents for firms of similar strategies and size
• Globally, research budgets grew by approximately 1% in 2025, with growth driven entirely by US firms
• 55% of an average research budget globally is taken up by each firm’s top 10 research providers, with 24% taken up by their top 3
• Average spend on Independent Research Providers (IRPs) has grown by 29% since 2022, but this still only represents 9% of total budgets

Mike Carrodus, CEO of Substantive Research, said: “The new regulations offering research payment optionality are intended to stimulate new coverage and improve research quality in Europe, but their success will be measured by the levels of adoption. Guidance and encouragement are needed from regulators as asset managers decide how viable this move is in the short-term. A few small buy side firms have already adopted CSAs in Europe, and when larger firms follow suit later this year, it is very likely that the vast majority of their peers join them in rapid succession. The move won’t lead to the unit price for a meeting with analysts or research platform access to increase arbitrarily, but it will mean that UK and EU research budgets will be far more open to new coverage, new tools and new providers.”

He added: “The current volatile and uncertain investment climate is driving the need for greater access to differentiated research, and we are seeing consumption levels rise across the board. In America this can be accommodated, as the costs will come out of trading commissions – but in Europe it can mean that asset managers have to make tough choices later in the year regarding which research they can continue to access, particularly at the smaller end of the industry. Our data shows that the largest brokers continue to dominate the market, and that asset managers in Europe need the ability to boost research budgets in order to ensure they have access to what they need, to be globally competitive.”

Background – FCA’s efforts to stimulate the research market post-MiFID II

In July 2024 the FCA released new rules within COBS2 covering segregated mandates, making it easier for asset managers to charge for research alongside trading commissions, as they did pre-MiFID II.  This showed that the FCA had listened to the buy side’s concerns, and allowed for both strategy or firm-level budgeting for research which was a crucial concession in order to encourage the market to engage and move across. More recently PS25/4 was released in May 2025 which covered pooled funds, which aligned with this approach and removed the last “dealbreakers” according to asset managers.

Adoption of the FCA’s new payment optionality has been slow – whilst the majority of asset managers want and expect the UK and European buy sides to move to CSA-funded research budgets. It will only be in the second half of 2026 that this switchover is likely to begin in earnest, due to enduring concerns regarding how this shift will be received by asset owners, as these costs are once again passed on to them, as they were pre-MiFID II.

Universe of firms covered by the research:

• 50 of the largest asset managers surveyed
• AUM : $20 Trillion
• Geographic split by headquarters: 35% N. America, 25% EU, 40% UK

Source: Substantive Research