Barclays clients could be charged £350,000 a year for something they currently get bundled for free

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Reuters/Clodagh Kilcoyne

LONDON – Clients of Barclays could have to pay as much as £350,000 ($455,000) for the bank’s highest level of equity analysis once new rules banning the free sharing of research come into force under MiFID II.

According to a report from Bloomberg on Friday last week, which cites an internal Barclays document, the bank is planning three levels of service – bronze, silver, and gold – with the gold package costing as much as $455,000 (£349,000).

For that, clients will get “unlimited reports, field trips and ‘occasional’ one-on-one meetings with analysts and corporate executives,” Bloomberg’s report notes.

At the other end of the spectrum, clients wanting the most basic access will have to fork out $30,000 (£23,000) to gain permission to read the reports.

The prices are not believed to be final, and there are likely to be “bespoke” packages available, which will be considerably more expensive. Prices from Barclays are the first emerge from a major investment bank on the equity side.

For a long time, banks have generally offered their clients free access to analysis and research as part of their overall package of service. However, that must stop from January 2018 when new MiFID rules come into force.

The rules surrounding payments for analyst research are designed to create greater separation between the money paid for trading commissions and investment research, and to force greater transparency on investment banks.

A recent report from consultancy giant McKinsey argued that investors could end up spending around $1 billion (£770 million) less under the new rules, choosing to be pickier about which banks and analysts to buy research from, generally choosing only those with the best records.

“McKinsey’s view is that there will be an end only to equity research as we know it,” the report’s summary notes.

“In five years’ time, sell-side equity research will likely still play a crucial role in the fundamental investment processes of the buy side, but most firms’ research functions will be smaller and more focused, governed by a strategic appreciation of the buy side’s need to produce alpha.”