Financial planners and dealer groups rank Lonsec as preferred ratings house on back of its research quality, client service and user-friendliness. Mike Taylor reports.
A strong performance across the key categories of client service, research quality and user-friendliness has seen Lonsec emerge at the top of a survey designed to assess financial planner and dealer group attitudes towards funds ratings houses.
Money Management has for more than a decade conducted its Rate the Raters survey to determine the attitude of funds management companies towards ratings houses, but believed the picture was incomplete in circumstances where financial planners and their dealer groups were not also surveyed.
Thus, in what represents the first in a permanent change to the Rate the Raters exercise, has this year conducted two surveys – one covering funds management companies (published in June) and this survey of planners and ratings houses.
The survey outcomes have been combined and subjected to an overlay devised between Money Management and research house Brillient to deliver the first-ever Money Management Funds Ratings House of the Year Award.
Significantly, the same ratings house that emerged as most highly-regarded amongst respondents to the funds management section of the Rate the Raters survey, Lonsec, has also emerged as most highly regarded among financial planners and dealer groups.
Indeed, the financial planning and dealer group survey found that measured against the criteria of corporate strength, staff, client service, website information and tools, quality of research, model portfolios, consulting and value for money, Lonsec emerged at the top of the index, followed by Zenith and then van Eyk Research.
The survey questions were devised in consultation between and van Eyk Research and the ratings houses were provided with a draft of the questionnaire and asked for comments. Some small amendments were made to the questions based on those comments.
The questions asked of the financial planners and the dealer group representatives sought their views on the following issues:
- Corporate strength – based on financial strength and stability.
- Staff – based on quality, experience and turnover.
- Client service – based on quality, presentation skills and proactive communication.
- Website information and tools – based on ease of use, breadth of information and integration with planning tools.
- Asset allocation research – based on methodology, resourcing, timeliness and value-add.
- Model portfolios – based on methodology, resourcing and timeliness and value-add.
- Consulting – based on service availability, quality and value add.
- Value for money – based on whether the research house offered value rather than just low cost.
Importantly, the survey respondents were asked to rate the most important factors helping them form their view of particular ratings houses, and it became clear that while the quality of the funds management research was paramount, user-friendliness in terms of both staff and website were also key.
For the past three years noted the manner in which Zenith had risen up the rankings in terms of the funds management element of its Rate the Raters survey, and this trend was confirmed in the financial planner/dealer group survey.
The research found Zenith being extremely well-regarded in terms of its personnel and client service, something which, when taken together with reasonable scores with respect to research quality and consulting, resulted in a strong result.
This was compared to Lonsec, which topped the ratings with respect to corporate strength, client service, website tools, research quality, model portfolios, consulting and value for money.
Van Eyk Research, which is regarded as being highly influential among financial planners, finished well down the survey index with respect to staff but placed a solid second with respect to its website and tools as well as its asset allocation research and third where client service was concerned.
Morningstar emerged as the fourth-rated player in the survey, just a basis point behind van Eyk Research, with fifth place being filled by Mercer.
While major ratings house Standard & Poor’s trailed the field, it scored seconds and thirds with respect to consulting, model portfolios, research quality and website information and tools.
