The study of the ratings given to listed companies by City brokers provides strong evidence of bias to customers. The findings suggest that reforms introduced by the European Union two years ago to reduce potential conflicts of interest are failing.
Under the Mifid II directive, investment banks and brokers had to begin charging asset managers separately for research and share trading, two services that in the past had been bundled together. The EU wanted to ensure that the cost of investment research was transparent and to improve the quality of analysis.