Joint Payments and the Future of Research Funding

The way UK and EU asset managers fund investment research has entered a new phase. Across a series of recent Research Funding-focused events hosted by S&P Global, industry participants explored the evolving research payment landscape, with a particular focus on the FCA’s proposed joint payments approach and its practical implications for buy-side research budgeting, Commission Sharing Agreement (CSA) operations, transparency, and research outcomes.

Throughout the discussions, one point was clear: the market conversation is moving beyond the choice between absorbing research costs through the P&L or charging clients directly. Instead, firms are increasingly focused on how to operationalize client-funded research budgets in a way that is compliant, auditable, scalable, and demonstrably value-accretive for end investors.

For many firms, that means revisiting joint payment models, not as a return to legacy practice, but as an opportunity to modernize research governance in a way enables client confidence and acceptance, sharpen budget discipline, and strengthen the link between research spend and client outcomes.

Client-Funded Research Budgets: A Strategic Reset

During the events, attendees discussed how the industry conversation around research funding has evolved. One of the key themes was the resilience of CSA-funded research budgets. Under a P&L-funded model, budgets can become vulnerable to internal cost pressures, particularly during more challenging market environments. There is a firm belief that a client-funded model may give firms greater flexibility to maintain access to the research inputs their investment teams value most, with many firms using the renewed focus on research budgeting as an opportunity to recalibrate processes that haven’t been touched for years, and creating the evidence that clients need to accept and understand the model.

The notion that enhanced governance can help strengthen the connection between consumption and investment priorities was also prominent. There was clear agreement that providing investment teams with a more structured way to influence where budgets are allocated reframes research from a discretionary cost into a performance input. Rather than asking “How do we reduce research spend?”, firms are asking a more strategic question: “How do we allocate research budgets in a way that supports better investment decisions and can be clearly justified to clients?”.

Audience Pulse: Market Sentiment on Client-Funded Budgets

Q: How do you view the industry shift toward client-funded budgets?

When asked how they viewed the industry shift toward client-funded budgets, 47.1% of webinar respondents described the shift as a positive step, while 44.1% expressed that it was too early to tell. This split suggests that market participants are cautiously optimistic rather than decisively affirmative. In other words: momentum is building, but confidence is still contingent on execution.

Rethinking Research Provider ROI

Expectations around research value are changing as funding models evolve. The core theme wasn’t that firms would just pay for research differently, it was that internal stakeholders, clients and regulators will require clearer, more repeatable evidence that budgets are being deployed effectively.

A key takeaway was that “return on research” can’t be reduced to volume metrics. Under a client-funded approach, the cost becomes more visible, so the narrative and the governance behind it must mature. Amongst the firms that joined us, there was emphasis that while investment teams need research to be responsive and relevant, firms must be able to document why particular providers are used and how their output supports the investment process.

Industry participants also anticipate a rebalancing in the approach to research procurement: some firms may broaden their provider mix to regain access to specialist perspectives, while others may consolidate to deepen relationships with fewer partners. Either approach is rational. What matters is that the operating model links research usage and voting decisions to a defensible valuation framework.

Finally, there is agreement that ROI is as much about communication as it is about measurement. If clients are paying explicitly for research, scrutiny increases, meaning firms need to explain not only what it has paid for, but also why it was appropriate, how value was assessed, and how spend decisions are governed over time. The result is a shift from “research as an input we consume” to “research as an input we manage and evidence.”

Audience Pulse: Explicit Payments and Research Scrutiny

Q: Does paying explicitly for research via client commissions increase scrutiny on its value?

When asked whether paying explicitly for research via client commissions increases scrutiny on its value, a combined 72.2% of respondents anticipate more scrutiny, while only 19.4% see no change, and a small minority (8.3%) expect reduced scrutiny.

The practical implication is that firms should not treat value evidence as optional. They’ll need a clear, consistently applied valuation framework, so that when clients ask “what did we get for the cost?”, the answer is credible, documented, and repeatable across providers and time.

The Opportunity: More Transparent, Resilient, Client-Aligned Research Funding

Joint payments represent more than a technical change to how research is paid for. Funding optionality creates an opportunity for firms to build greater transparency into research spending, strengthen budget resilience, and align research provider selection more closely with investment priorities and client outcomes.

For the buy side, forming the correct client narrative should be the priority, whilst also being cautious of simply treating joint payment adoption as a compliance checkbox. The opportunity is to modernize research procurement and streamline operational workflows while building the governance and valuation evidence clients need to understand what they’re paying for and why it has value.

In a market where research quality, budget discipline, and transparency all matter, firms that get the operating model right may be better positioned to strengthen client trust and support investment teams with the insights they need across market cycles.

Audience Pulse: The Biggest Remaining Challenge

Q: What is the biggest challenge that remains in implementing a joint research payment model?