* New EU rules to go live in January 2018
* Firms join growing list of managers to pay for research
* Firms' moves a reversal of earlier plans (Recasts, adds Invesco, Schroders, bullet points)
LONDON, Sept 15 (Reuters) - Three major asset managers said they no longer planned to ask clients to pick up the bill for external research when new European Union legislation comes into force in January 2018.
Germany's Union Investment, Britain's Schroders and U.S. peer Invesco had all planned to pass on some or all of the costs to investors in their funds, but since then many of their rivals had said they would fully absorb the costs.
BlackRock, the world's biggest asset manager, on Thursday joined the list of companies that said they would bear research costs when the EU's Markets in Financial Instruments Directive II, or MiFID-II, comes into force on Jan. 3.
Under the rules, asset managers will have to agree a price for all research obtained from brokers and then either pay for it themselves or pass it on to clients. Previously they were given research for free in exchange for trading through the brokers.
"Union Investment has decided that it will no longer charge external research costs... and instead will recognize them in its own income statement," it said in a statement.
Union Investment said the decision came after the firm completed several in-house projects to calculate future research costs.
"Our objective was that the total amount of future transaction and research costs would not be any higher than they are currently," Chief Executive Hans Joachim Reinke said.
"We therefore anticipate that, following our decision, the total costs for our customers will be lower."
Invesco said last month it preferred to fund payments for external research in a way that involved passing costs on to clients, although it acknowledged legal and regulatory uncertainties and competitive pressure could see that change.
On Friday, the company, which manages $876.9 billion in assets across a range of equity, fixed income and other funds, said it had decided to pay for research for Mifid-impacted funds and client accounts from January.
"We are committed to ensuring our investment professionals have access to the external research market, which is critical to decision-making and delivering the long term investment excellence our clients have come to expect from Invesco."
Schroders, which already paid for all external research for its quantitative equity and fixed income funds, said it would also now pay for research on its other equity funds, after previously planning to pass the costs on to clients.
It also said it was considering applying this approach to other jurisdictions.
"While we have met the main research principles of MiFID II for a number of years, we have concluded that we should absorb the cost of research for those clients affected by MiFID II," Peter Harrison, Group Chief Executive, said in a statement. (Editing by Jason Neely/Keith Weir)