Zenith and Lonsec neck and neck

rate the raters research dealer groups research house Lonsec Research Zenith mercer morningstar

18 November 2016
| By Oksana Patron |
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Dealer group support has seen Lonsec Fiscal regain its mantle in part two of Money Management's 2016 Rate the Raters survey, Oksana Patron finds.

Although a positive assessment by the financial planning dealer groups has seen Lonsec Fiscal this year regain its mantle in the second part of the 'Rate the Raters' survey, the Money Management Ratings House of the Year title has been evenly split between both Zenith Investment Partners, the winner of the first part of the survey, and Lonsec.

The strong dealer group assessment more than offset a comparative drop in performance in the eyes of fund managers in the first part of the survey, and saw Lonsec recover to outperform its competitors across the majority of categories.


The Melbourne-based research house topped the charts across five categories and shared the top spot with its rival Zenith in two categories.

Lonsec was praised this year for the introduction of new tools which helped the company distance itself from its rivals and receive the top score for website information and tools as well as improve its ratings in the area of asset allocation research, model portfolio and consulting services.


Also, as far as the corporate strength was concerned, Lonsec moved to the top spot from the third place a year ago, sending both Zenith and Morningstar down the ranking.

Corporate strength

According to dealer groups participating in the 2016 Rate the Raters Dealer Group Survey, Lonsec was the best performer and scored the highest combined ‘good' and ‘excellent' ratings for its corporate strength with 85.7 per cent of the respondents expressing such a view.

Zenith claimed the second place and came marginally behind Lonsec, with 85 per cent of all the dealer groups participating in the survey, which had used its services, rating the firm's corporate strength as either ‘good' or ‘positive'.

With 75 per cent and 77 per cent of the surveyed groups ranking, respectively, Mercer and Morningstar's corporate strength as either ‘good' or ‘excellent' the companies were lagging behind their peers.

However, across the same category, Zenith was the one that received the lowest rating as 7.7 per cent of respondents described its corporate strength as ‘poor' while none of other researchers scored rating lower than average.


Zenith topped the table for the quality of its staff, the category which in minds of dealer groups was the second most important and essential criteria when it came to selecting a qualitative research provider. In this category the dealer groups were to assess the overall level of their satisfaction from the quality of research houses' staff, with a particular focus on staff's experience and turnover. Zenith, for which it was its second win in a row, emerged as unquestionable winner in this category with an overall score of 92 per cent of the respondents granting the firm ‘above average' rating of its staff.

The researcher also managed to drive the proportion of those who viewed its staff as ‘excellent' up to 54 per cent, from 44.5 per cent last year, and to break the 2014 level which saw 50 per cent of those stating the quality of Zenith staff to be ‘excellent'.

In this category Lonsec claimed second spot with only 79 per cent of respondents giving the company either ‘good' or ‘excellent' rating and a further seven per cent judging its staff as ‘poor'.

Mercer moved to the third place, overtaking its rival Morningstar, which saw the smallest proportion of dealer groups, of less than 70 per cent, who voted in the survey and described its staff quality above average. Additionally, some of the dealer groups who rated Morningstar this year expressed concerns regarding the company's recent staff turnover.

Client service

Although Zenith saw a significant decline in its ‘excellent' ratings, which fell from around 44 per cent last year to only 23.1 per cent of respondents this year who rated the company's client service as excellent, it was still a winner across this category, scoring 76 per cent of the combined ‘good' and ‘excellent' rating.

Also, this year's survey found that Mercer was the only research house that received no less than average rating for its client service. However, as only 50 per cent of respondents rated Mercer as ‘good' or ‘excellent' it left Mercer at the bottom of the ranking as far as client service was concerned.

At the same time, only 54 per cent of respondents said Morningstar's satisfactory level was above average and a further eight per cent said it was ‘poor' while Lonsec managed to win the positive feedback from around 71 per cent of those assessing the company this year.

Website info and tools

Website information and tools category, which represented the third most important criteria for dealer groups to subscribe to a qualitative fund research or ratings provider, also saw a shift this year.

Lonsec emerged as a clear winner with all dealer groups surveyed by the Money Management rating it as either ‘good' or ‘excellent' across the entire category. The research house was also praised for the introduction of the new tools which enhanced its offering considerably. Lonsec also pushed its rival and last year's winner, Zenith, down to second position this year, on par with Morningstar, as both firms saw 69 per cent of respondents satisfied with their offering and rated it above the average.

On the other hand, Mercer lagged behind its rivals as 67 per cent of the respondents described their level of satisfaction as average and a further one-third of the surveyed groups said its offering was ‘poor'. It was also the only company that did not receive ‘good' or ‘excellent' ratings.

Fund and fund company research

The fund and fund company research was voted, by the third time in a row, the most important and essential single factor for dealer groups in their decision-making process when selecting fund research providers. The respondents were also asked to rate the coverage breadth and depth, reporting formats, responsiveness, and value-add the research houses offered.

According to the survey, Zenith continued its upward trend from last year and won thanks to a significant increase in its ‘excellent' ratings, from 55.5 per cent in 2015 to almost 70 per cent this year, with further 31 per cent of respondents rating its fund and fund company research as "good". Zenith was also the only research house that did not receive a rating lower than ‘good' in this category and highlighted the high level of satisfaction from the dealer groups.

Morningstar and Lonsec were both placed second, with 85 per cent of respondents rating them higher than average in this category. However, Lonsec received a higher proportion of an ‘excellent' rating with 54 per cent of respondents, compared with 15.4 per cent for Morningstar and another 69 per cent that rated the research house's fund research capabilities as ‘good'.

On the other hand, Mercer's capabilities of conducting fund and fund company research were appreciated by only 50 per cent of the surveyed companies who went on to describe them as either ‘good' or ‘excellent'.

Asset allocation research

Lonsec proved to be the top performer in the asset allocation research category this year, with 76 per cent of dealer groups viewing the firm's research capabilities in this area as either ‘good' or ‘excellent'. Zenith and Mercer saw about the same share with 66.7 per cent of respondents rewarding them with combined ‘good' and ‘excellent' ratings.

However, there were some important differences as to how the two companies were viewed. While Zenith improved its share of ‘excellent' ratings across this category to 50 per cent, compared to 39 per cent last year, Mercer received no ‘excellent' rating this year with an additional one-third of the respondents stating its offering was unsatisfactory and described it as ‘awful'.

Morningstar managed to grow its share of positive feedback, which saw a jump from 38.5 to over half of respondents giving the company either ‘good' or ‘excellent' ratings, contrary to last year the company received no ‘poor' grade.

Model portfolio

As far as this category was concerned, Lonsec again delivered the strongest performance, as 33.3 per cent of respondents described it as ‘excellent' and a further 42 per cent stated that it was ‘good'.

Zenith was pushed down from the top spot and finished second and on par with Mercer. According to 66.7 per cent of dealer groups participating in the survey, both Lonsec and Mercer were rated as either ‘good' and ‘excellent' in this category.

Morningstar saw a jump to 46.2 per cent of the surveyed companies, up from 38.5 per cent last year, who granted the company an ‘above average' rating for its model portfolio capabilities.


Again Lonsec clearly distanced itself from competitors in terms of the quality of its consulting services, as 76 per cent of respondents assessed its quality as above average.

At the same time, Zenith, which came second, saw only 58 per cent of the clients participating in the survey to reward it with either ‘good' or ‘excellent' rating. Additionally, it disappointed some of its clients across this category as 8.3 per cent viewed its consulting services as below average and gave the company a ‘poor' rating.

Zenith was followed by Morningstar and Mercer, which saw 54 per cent and 33.3 per cent of the respondents, respectively, that described their level of satisfaction from the provided consulting services as above average.

Value for money

In the value for money category there was no single winner as both Lonsec and Zenith were rewarded with a combined ‘good' or ‘excellent' rating by 85 per cent of the surveyed dealer groups.

However, Lonsec, which came second in this category last year, significantly increased its ‘good' rating from 40 per cent of respondents last year to 77 per cent this year.

Additionally, almost eight per cent of the respondents rated Lonsec's value for money as ‘excellent'.

At the same time, Zenith managed to grow its share of ‘excellent' rating from 39 per cent last year to 46 per cent this year. However, the number of respondents who assessed the value offered by the company as ‘good' dropped to 39 per cent from 55.5 per cent last year. This deteriorated the overall result, from a combined ‘good' and ‘excellent' rating of 94 per cent last year to 85 per cent this year.

On the other hand, Zenith was also the only company in this category that had respondents describe their value for money proposition as ‘awful'.

Overall rating

In the minds of dealer groups that voted in the survey the two research houses, Zenith and Lonsec, demonstrated the highest value and both companies were equally granted the highest overall rating this year, with 85 per cent of the respondents describing their overall level of satisfaction as either ‘good' or ‘excellent'.

Zenith which won in this category last year saw a slight jump in an ‘excellent' rating from 44 per cent last year to 46 per cent, and the proportion of dealer groups that stated that its overall performance was ‘good' slightly decreased from 44 per cent from 39 per cent this year.

On the other hand, Lonsec managed to significantly increase its ratings as 56 per cent of respondents gave the firm a ‘good' or ‘excellent' rating last year, compared to 85 per cent in 2016.

Morningstar also saw a jump in the number of users who rated the company's overall as higher than average, as 66.7 per cent described it as either ‘excellent' or ‘good', compared to only 36 per cent last year.

However, Morningstar found itself at the bottom of the rankings as Mercer managed to increase its combined ‘good' or ‘excellent' rating to 75 per cent despite around one-quarter of the respondents that labelled it as ‘awful'.

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