Perpetual’s research pick and mix

Not all research houses are created equal, and even within the leading research houses there are areas of strength and weaknesses that must be accounted for.

That’s one of the views driving the investment research process at Perpetual Private Wealth, the advice arm of the listed funds management company. Perpetual Private Wealth uses the services of a number of Australian investment research houses, including van Eyk Research, Mercer, Lonsec and, to a limited degree, Morningstar.

Perpetual Private Wealth’s general manager of investment and strategic advice, Angus Benbow, said the group had undertaken its own ‘rate the raters’ process which influences the way it uses research reports from the various providers.

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“We’ve actually rated the research houses. Some research houses are stronger in certain sectors than others and we have an understanding of that and make sure we’re aware of that when looking at reports.”

Benbow said Perpetual prefers not to lean too heavily on the research provided by external research companies.

“We don’t rely on our research providers,” Benbow said.

“We have our own research process and that’s how we formulate our views.”

Benbow said this was an important point of differentiation for many of the group’s clients, who had made increasing demands over the past 18 months with regards to the group’s research output.

“Our clients and prospects increasingly want to see that their adviser has got a view, and that it is a house view rather than purely coming from an external research house,” Benbow said.

Clients are also demanding more transparency around the research process, along with education around investment products and why they are being recommended.

Benbow said while the view taken by Perpetual is generally “not fundamentally different” to those of the research houses, he said the group placed a stronger emphasis on the corporate governance and risk management processes employed by fund managers. The group also has a process that is likely to exclude new companies from the investment line-up.

Earlier this year Perpetual Private Wealth recruited former van Eyk Research head of research, Nigel Douglas, to manage the group’s managed fund research, while former QIC senior analyst Stephen Kench will look after direct equities.

Both Douglas and Kench are supported by two analysts, with the team of six reporting to Benbow.




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