Money Management's Top 100 Dealer Groups survey reveals research house Lonsec has surged ahead of its competitors over the past year, taking the long-held industry-leading position from van Eyk Research. Lucinda Beaman reports.
Lonsec has taken the lead as the research house of choice for many of Australia’s top 50 largest dealer groups.
The research house is now the preferred investment supplier to more than 16 of the top 50 dealer groups, including Professional Investment Services (PIS), groups owned by National Australia Bank (NAB), notable new clients including Count Wealth Accountants and ANZ Financial Planning, and numerous other independently owned groups.
Over the past year Lonsec has more than doubled the number of top 50 dealer groups who point to the Melbourne-based group as their key research partner.
Sydney-based Morningstar has also increased its number of top 50 clients, attracting new clients, including the Commonwealth Bank-owned (CBA) dealer groups, Commonwealth Financial Planning and Financial Wisdom, and Industry Fund Financial Planning, while retaining top 10 clients including Millennium3 Financial Services and RBS Morgans.
Van Eyk Research retained its key contract with Australia’s largest dealer group, AMP Financial Planning, and a number of other dealer groups owned by AMP, including Hillross Financial Services and Genesys Wealth Advisers, as well as Suncorp-aligned dealer groups. But client losses over the year meant the research house lost its long-held industry leading position.
Standard & Poor’s (S&P) lost its CBA contract, but extended its relationship with rival bank Westpac. And while Mercer is working hard to break into the retail investment market, it still has a way to go. Mercer signed RI Advice Group as a new client, with the ANZ-owned group joining Charter Financial Planning and AXA Financial Planning as some of the only groups in the top 50 using the traditionally institutionally focused research house as their key provider.
Van Eyk Research and Morningstar are now neck and neck as preferred suppliers for the top 50 dealer groups. But the number of top 50 dealer groups pointing to Morningstar as their preferred secondary supplier places Morningstar in second place, behind leader Lonsec, in terms of overall market reach.
It is common practice in the industry for dealer groups to use investment research as a differentiator in value propositions between advisers, with ‘premium’ advisers receiving research from the dealer group’s preferred supplier.
Many dealer groups are also working to improve their offer to advisers by boosting their internal investment research teams, who provide an additional overlay to the output received by the traditional research houses.
A number of dealer groups, including Centric Wealth, Perpetual Private Clients and Australian Unity Financial Planning make a point of noting their advisers rely primarily on the output of their own internal investment teams, who in turn rely on a variety of research sources.
Some dealer groups, including Perpetual Private Wealth, have said this is the only way to ensure quality for advisers when even the top research houses have areas of strengths and weaknesses in their assessments.
