Communicating the value of research falls on researchers
Despite new disclosure requirements being welcome by most of the industry, articulating the value-add of investment research to consumers is left up to the interpretation of researchers, according to Zenith Investment Partners director David Wright.
One of the main purposes of Regulatory Guide 79 'Research report providers: Improving the quality of investment research' is to help the end consumer readily understand and identify the amount of value that research has added to their investment decision, he said.
According to Wright, it's left up to the research house to decide how best to present that data in their reporting.
"As an example, one of the things we do is (report) the value we've added through the ratings in a particular asset class. You can do it that way or you can do it on a per fund basis," he said.
The question may then be how often a research house is required to report this information, and whether it must then be broken down into the benchmark performance of 'highly recommended', 'recommended' and 'approved' products, he said.
"It can get pretty complex pretty quickly, and the issue with that is it then makes it difficult for the potential user to understand," he said.
"I'm not sure ASIC (Australian Securities and Investments Commission) has the answers on how they want that presented - so it may be a matter of research houses doing the work, presenting it and asking whether it is acceptable."
Recommended for you
Licensee Centrepoint Alliance has completed the acquisition of Brighter Super’s annual review service advice book, via Financial Advice Matters.
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
