Lonsec retains momentum

morningstar Zenith lonsec mercer

5 December 2017
| By Oksana Patron |
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After regaining the top spot in the first part of Money Management's 2017 Rate the Raters survey this year, Lonsec has again emerged as a clear winner in the eyes of the financial planning groups, writes Oksana Patron.

Although Zenith Investment Partners was praised for its staff quality and client services as well as the firm’s capability to conduct the fund and fund company research, it was Lonsec that topped the rankings across five criteria and finished ahead of its rivals.The research house received top score for its website information and tools, asset allocation, model portfolio and consulting services.

Planning groups also decided that Lonsec represented the best value for money from all research houses.


Value for money

According to Money Management’s survey, value for money was the second most important feature offered by research houses, with 86 per cent of respondents believing it was either ‘essential’ or ‘very important’.

Although there was no single winner across this category last year, the 2017 survey showed a different picture. Lonsec emerged as a clear winner in this category as the company managed to receive the highest score for its value for money from the financial planning groups, with 77 per cent of them describing it as either ‘good’ and ‘excellent’. 

This, however, represented a significant drop compared to last year’s result when both Lonsec and Zenith were rewarded with a combined ‘good’ or ‘excellent’ rating from 85 per cent of the surveyed financial planning groups.

Zenith also saw a heavy drop this year in positive feedback from its clients, with only 62 per cent of the financial planning firms that subscribed to its services rating its ‘value for money’ as either ‘good’ or ‘excellent’.

In addition to these figures, only half of the surveyed financial planning groups that chose to subscribe to Morningstar for its qualitative research were of the opinion that the company offered good value for money.



Website and tools

The survey found that ‘website information and tools’ was another key criterion for the financial planning groups, with 38 per cent of those who participated in the survey describing the category as essential and further 46 per cent claiming it was ‘very important’ for rating research houses.

This year, Lonsec again managed to top the table and scored the highest proportion of combined ‘good’ and ‘excellent’ rating across this category. Lonsec also experienced a significant decline in positive feedback, with only 88.2 per cent of all the financial planning groups which were subscribed to the firm’s qualitative fund research describing its service as either ‘excellent’ or ‘good’.

The 2017 survey results also saw a shift away from previous years’ findings underneath Lonsec. 

The number of dealer groups that rewarded Morningstar with either an ‘excellent’ or ‘good’ rating for the quality of its website and tools grew from 69 per cent last year to 72.2 this year, pushing Zenith down one position to third.

Across this category, Mercer lagged behind its rivals with less than half of the respondents describing their level of satisfaction as higher than average and granting the company either a ‘good’ or ‘excellent’ rating for its website and tools.


Asset allocation research

Lonsec continued its upward trend and proved to be again the top performer across the asset allocation research category, which 38 per cent of respondents felt was an essential criterion. The research house saw a large number of the financial planning groups (76.5 per cent) viewing its asset allocation research capabilities as either “good” or “excellent.”

Zenith, which came second in the category this year, saw a slight increase in it’s combined ‘good’ and ‘excellent’ rating to 69 per cent against 66.7 per cent of respondents who rated the firm’s asset allocation research as above average last year.

Mercer was pushed down the ranking, from second position in 2016 to the bottom place this year, with 44.4 per cent of the respondents rewarding it with an above average rating across this category.

At the same time, Morningstar ended in third spot and managed to grow its share of positive feedback with 55.6 per cent of respondents giving the company either ‘good’ or ‘excellent’ rating this year from a much lower base of 38.5 per cent in 2016.



As far as the consulting services category was concerned Lonsec again took a lead, with 71 per cent of its clients surveyed by Money Management describing the firm’s consulting services as either ‘excellent’ or ‘good’. 

Lonsec was closely followed by Zenith in consulting, which saw a significant year-on-year increase from 58 per cent last year to 69 per cent of respondents this year who ranked those services as above average.

At the same time, Morningstar which took third place experienced a jump from 54 per cent last year to 61 per cent. 


Model portfolio

Lonsec distanced itself from competitors across the model portfolio category, with 12.5 per cent of respondents describing the firm’s capabilities category as ‘excellent,’ and a further 56 per cent stating that they were ‘good’.

However, the per centage of those financial planning groups who participated in this year’s survey and granted the company an ‘excellent’ rating dropped by almost two thirds.

Zenith maintained its second spot, although similarly to Lonsec saw a significant drop in an overall number of respondents who rated its model portfolio service as either ‘good’ or ‘excellent;’ 67 per cent last year to only 54 per cent this year. 

Across the board, Morningstar saw a slight decrease to 44 per cent of the surveyed companies, down from 46.2 per cent last year, who rewarded it with an ‘above average’ rating for its model portfolio capabilities. 



According to the 2017 Money Management Rate the Raters dealer group/ financial planning groups survey, 32 per cent of respondents rated the quality of staff as an essential criterion when it came to the research houses.

Zenith again topped the ranking in 2017, marking its third consecutive victory in the category. This year however, the firm saw a decline in the overall number of respondents who described the quality of its staff as either ‘excellent’ or ‘good’, from 92 per cent in 2016 to 85 per cent this year.

Lonsec came in second for the staff category, with 82.3 per cent of combined ‘good’ or ‘excellent’ ratings. It is worth noting however, that the company managed to score the highest proportion of ‘excellent’ ratings, with 47 per cent of all respondents who used their services rating the quality of its staff that way.

At the same time, Morningstar received either ‘good’ or ‘excellent’ rating from almost three quarters (72 per cent) of the respondents, while Mercer finished with the same result as last year, receiving the top score for its staff quality from almost 70 per cent of groups.


Fund and fund company research

In the eyes of the financial planning groups surveyed, the fund and fund company research was voted the most important service the research houses provided to their clients, with half of all respondents (51 per cent) claiming it was ‘essential’, and further 38 per cent saying it was ‘very important’.

Zenith emerged as a winner across this category for the third year in a row, with almost 85 per cent of respondents viewing its fund and fund company research service as either ‘good’ or ‘excellent’. The company did, however, experience a significant decline in participating respondents who granted it the ‘excellent’ rating from almost 70 per cent in 2016 to just 23 per cent this year. 

Comparatively, the number of respondents who assigned Zenith a ‘good’ rating for this service almost doubled, to 61 per cent from only 31 per cent last year.

Zenith was closely followed this year by Lonsec in the category, which saw 82.3 per cent of respondents rewarding it with a combined ‘good’ and ‘excellent’ rating. 

Morningstar dropped to third place in the eyes of the dealer/ financial planning group respondents this year as far as its quality of fund and fund company research service was concerned, and was ranked as either ‘good’ or ‘excellent’ by only 72.2 per cent against 85 per cent in 2016.

Although Mercer landed at the bottom of the ranks again, the company saw improvements, with over two thirds of respondents this year describing the company’s capabilities of conducting fund and fund company research as either ‘good’ or ‘excellent’. 


Client service

With almost 84 per cent of financial planning groups believing client service to be either ‘essential’ or ‘very important’ criterion, Zenith topped the ranking for a second consecutive year.

The research house saw a slight improvement in positive feedback and scored 77 per cent combined ‘good’ and ‘excellent’ ratings altogether, one per cent higher than last year.

Lonsec maintained its second position in the category, and was the receiver of positive feedback for its client service from 71 per cent of respondents, who described it as either ‘good’ or ‘excellent’.

By comparison to these figures, Morningstar’s client service was described as above average by only 56 per cent of respondents, which represented a slight improvement in satisfactory level from the last year statistic of 54 per cent.

However, Morningstar was also the only research house where client services were rated as either ‘awful’ or ‘poor’ by close to 17 per cent of the clients voting in the survey. Last year, the lowest rating the research house received in this category was ‘poor’ (7.7 per cent). 

Although this year’s survey found that Mercer managed to slightly improve its situation as the company saw its ‘excellent’ rating grow to 11.1 percent. The combined good and excellent rating was still the lowest among its peers, leaving the group at the bottom of ranking for its client service. 








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