Hardman & Co has launched free and “MiFID II compliant” independent research for advisers on the Enterprise Investment Scheme marketplace, claiming it is the only company to do so.

The firm said its research constitutes a “financial promotion” but does not contain a recommendation or rating system so recipients do not have to go through so-called ‘know your customer’ exercises. The research is free because it is paid for by the provider.

Hardman & Co said: “The main aim of MiFID II is to ensure transparency in the relationship between fund managers and brokers/suppliers and eliminate inducements, in the form of broker research provided for free to fund managers to encourage them to deal with that broker. Hardman & Co is not inducing the reader of research on a product provider to trade through us, as we do not deal in any security or legal entity.

“In addition, Article 12(3) of the MiFID II directive makes it clear that commissioned research falls within the scope of ‘minor non-monetary benefits’ and therefore can be freely received by the recipient.”

The firm added that, under the Markets in Financial Instruments Directive II (MiFID II), advisers must understand the nature of the product and risk profile they offer advice on. With this in mind, Hardman & Co said its team of 18 analysts can assess the product “in the context of its market sector, focusing on investment risk, rather than the tax benefits”

“We take this approach in our research and do not use ratings which do not consider the investor’s risk profile. As a result, we are confident that we help advisers meet both regulatory and client needs.”

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