Managers open up on research houses
Researchhouses have not met the expectations of funds managers in the key areas of ethics, integrity and disclosure, according to results from the inauguralMoney ManagementRating the Raters Survey.
The survey found that more than half of funds managers felt the payment of a fee compromises the outcomes of research, regardless of which fee model the research houses employed.
Furthermore, a large majority of managers felt there were issues regarding accountability and nearly all managers involved in the survey felt levels of disclosure in terms of ownership and financial influence should be increased.
Transparency in research was also called into question, with only 15 per cent of managers able to state they felt research processes were fully transparent. This response sat alongside that of the issue of the overall capabilities of research houses, with most managers responding that these capabilities were only of average standard.
Managers also had a hard time differentiating the service of research groups but say that past performance is not such a critical measure in researching funds.
Despite the criticisms of the research houses, funds managers remained positive in other areas, most noticeably that of the benefits of research and the need for a range of research providers in the industry.
This was most strongly borne out when funds managers rejected comments that there should be a single process for research.
Research houses also came in for some praise, with a majority of managers stating that the results of ratings provided insights into the business of the funds managers .
Full report on page 17.
AUTHOR
Jason Spits
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