Zenith finishes on top

research and ratings Zenith morningstar mercer lonsec

28 August 2015
| By Nicholas |
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Respected staff and highly rated research have been key factors in securing a second successive Money Management Ratings House of the Year title for Zenith Investment Partners.

After finishing the first part of the annual Money Management Rate the Raters survey neck-and-neck with Lonsec, Zenith emerged as a clear winner when the views of dealer groups were taken into account.

The Melbourne-based research house topped the ratings across six key criteria, ahead of Morningstar, Lonsec, and Mercer.

While Zenith maintained its status as the number one ratings house, respondents' views of the excellence of the company's performances dipped in a couple of categories.

However, Zenith's declines were surpassed by falls in the ratings given to the three other major research houses, and increased its share of ‘excellent' rating in key categories.


Despite falls in ‘excellent' ratings across a number of categories, Zenith's overall ‘excellent' rating jumped almost 10 per cent compared to the 2014 survey, with 44.5 per cent of respondents giving the research house the top rating this year (see Chart 1).

The same proportion of respondents gave Zenith a ‘good' rating overall, while 11 per cent said it was ‘average'.

Lonsec recorded the second-highest ratings for its overall performance, with 55.5 per cent of respondents describing the firm as ‘excellent' or ‘good' — up 10 per cent on the 2014 data — with 44.5 per cent giving the research house an ‘average' rating.

For users of Morningstar research, 61 per cent believed its overall performance was ‘average', with 31 per cent rating it as ‘excellent' or ‘good', down from 45.5 per cent in 2014, while eight per cent believed it was ‘poor' this year.

Having received a ‘good' overall rating from 75 per cent of respondents in 2014, three-quarters of users described Mercer as ‘average' this year, with just 12.5 per cent rating it as ‘good', while the same proportion gave Mercer a ‘poor' rating this year, having not such a rating last year.

Overall (Chart 1)

Fund and fund company research

Fund and fund company research was rated as the most ‘important' and ‘essential' service a research house provides its clients by all those who took part in the 2015 Money Management Rate the Raters Dealer Group survey (see Chart 2).

Again, Zenith increased its ‘excellent' rating from 53 per cent in 2014 to 55.5 per cent, with a further 39 per cent saying its fund and fund company research was ‘good' and 5.5 per cent believing it was ‘average'.

Morningstar also saw a swing in respondents viewing its fund research as ‘good' or ‘excellent', climbing four per cent on the 2014 results, to 77 per cent.

However, it was not all positive news for Morningstar, with eight per cent of respondents deeming its fund and fund company research to be ‘poor', having not received a rating of less than ‘average' in last year's survey.

For the second year running, dealer groups ranked the quality, experience and turnover of ratings houses' staff as the second most important feature of a research company.

Among respondents who reported using Lonsec fund and fund company research, there was a 10 per cent decline in the proportion of ‘good' ratings in 2015 compared to 2014, when 70 per cent viewed it as ‘good', with 10 per cent believing the research house's performance in this area had slipped to ‘poor'.

Despite the view among some respondents, the proportion of Lonsec users who reported its fund research was ‘excellent' remained steady at 10 per cent, with 20 per cent viewing it as ‘average' — the same as last year.

Mercer was the only research house that did not record an ‘excellent' rating from respondents, with one in four rating its fund and fund company research as ‘good' — down from a 75 per cent ‘good' or ‘excellent' rating in 2014 — while 12.5 per cent regarded the firm's research as ‘poor'.

Funds and fund company research (Chart 2)


For the second year running, dealer groups ranked the quality, experience and turnover of ratings houses' staff as the second most important feature of a research company (see Chart 3).

Despite seeing a decline in the proportion of respondents rating Zenith's staff as ‘excellent' (44.5 per cent, down from 50 per cent in 2014), the research house topped the table in this category.

However, the survey found 94.5 per cent of those who used Zenith's services ranked its staff as ‘good' or ‘excellent', while 5.5 per cent said they were ‘average', down from 10 per cent in 2014.

Lonsec was second-best again with 70 per cent combined ‘good' and ‘excellent' rating, down almost 19 per cent on last year's results, while 30 per cent said the research house's staff were ‘average'.

Once more Mercer was at the bottom of the rankings, having had one in four users reporting its staff were ‘excellent' in 2014, none responded so positively this year. The research house also saw its ‘good' rating in this category fall from 37.5 per cent last year, to 25 per cent this year, while one in eight described them as ‘poor' — having had no below ‘average' responses in the last survey.

Morningstar also saw a decline in the dealer groups' ratings of its staff, with eight per cent rating them as ‘excellent' (down 10 per cent on last year); while another eight per cent said they were ‘poor'.

Staff (see chart 3)

Client service

With one in four respondents rating research houses' client service as an ‘essential' part of their offering, Zenith again topped the ratings (see Chart 4).

However, the firm's ‘excellent' rating for its client service slipped three per cent to 44.5 per cent over the last 12 months.

The research house's lowest rating from users was again ‘average', with just 5.5 per cent describing the firm's client service as such, while 50 per cent believed it was ‘good' — up from 42 per cent in 2014.

Morningstar was the only other research house whose client service was rated as ‘excellent', with eight per cent giving it such a rating, down from 18 per cent in 2014.

A further 15 per cent said the company's client service was ‘good' — a drop of 12 per cent on last year's survey — with almost two-thirds of respondents saying it was ‘average', and a further 15 per cent describing Morningstar's service as ‘poor'.

Having recorded an ‘excellent' rating of over 22 per cent for its client service in last year's survey, Lonsec failed to match the result this year.

However, the company had the second highest ‘average' or above rating (90 per cent), with just one in 10 deeming it to be ‘poor'.

Having shown signs of improvement in 2014, Mercer's client service slipped over the last 12 months in the eyes of respondents, with just 12.5 per cent rating it as ‘good' — down from 50 per cent — and the same proportion describing it as ‘poor', with three quarters of users saying its service was ‘average'.

Client service (Chart 4) 

Website info and tools

Website information and tools were the fourth most important offering a research house could provide its clients, dealer group respondents reported (see Chart 5).

While Zenith again led the way scoring the highest proportion of ‘excellent' (22 per cent) and ‘good' (61 per cent) ratings from users, Lonsec was the only firm whose combined ‘good' and ‘excellent' reviews increased in 2015 compared with last year's data.

The survey saw Lonsec's ‘excellent' rating for its website and online tools jump nine per cent to 20 per cent, while half of respondents rated it as ‘good', with those saying it was average dropping slightly from one in three to 30 per cent.

Morningstar trailed Lonsec in third on the ranks for its website information and tools, with 15 per cent rating it as ‘excellent' (down from 27 per cent in 2014) and 54 per cent viewing it as ‘good' (up from 45 per cent).

While the defunct van Eyk Research group was the only research house to score a rating of below ‘average' for its online offering in 2014, 12.5 per cent of respondents believed Mercer's website had slipped to "poor", while 75 per cent described it as ‘average' — up from 63 per cent last year.

Although Zenith's combined ‘good' and ‘excellent' rating fell shy of the 85 per cent score from the 2014 survey, the research house recorded the second biggest proportional increase in its ‘excellent' rating, climbing seven per cent to 22 per cent.

Website info and tools (Chart 5)

Value for money

Almost three-quarters of respondents to the dealer group survey believed that the value for money a research house offered was ‘very important' or ‘essential' (see Chart 6).

Once again Zenith was the top rated research house when it came to the value it offered dealer groups, with its ‘excellent' rating climbing 7.5 per cent compared to the 2014 survey, to 39 per cent, while just 5.5 per cent rated it as ‘average' — its lowest result — down from 10.5 per cent.

Lonsec claimed second spot, with 40 per cent of respondents viewing its value for money offering as ‘good' — up from one in three last year — with the remaining 60 per cent rating it as ‘average'.

While Lonsec wiped away its 11 per cent ‘poor' rating from the 2014 survey, Morningstar saw its ‘poor' score for its value proposition increase to 25 per cent, as it failed to match last year's nine per cent ‘excellent' review from users. Despite not receiving a single ‘excellent' rating, the company's ‘good' ranking increased by six per cent to 42 per cent.

Mercer again filled the bottom place on the ladder, recording a marked decline in the value it offered dealer groups compared with the 2014 survey, when 12.5 per cent rated it as ‘excellent', while a further 75 per cent believed its offer was ‘average' to ‘good', while its lowest rating was ‘poor'.

However, this year, the research house recorded the dealer group survey's only ‘awful' rating for value, with a quarter of respondents deeming it to be so, while a further 12.5 per cent said it was ‘poor', and 62.5 per cent rated it as ‘average'.

Value for money (Chart 6)

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