S&P defends product-paid model
Research house Standard & Poor's (S&P) has defended its manufacturer-pays model, saying it increases transparency at a number of levels, despite acknowledging it leaves the research house beholden to the wishes of product manufacturers.
In a white paper examining the three most common business models used by Australian investment research houses, S&P said its model creates transparency and a wide dissemination of information.
S&P said the manufacturer-pays model allows fund ratings to be provided to all investors for free, leading to "education of the marketplace, [which] is necessary to avoid potential misuse of fund ratings".
The research house also said the manufacturer-pays model allows it greater access to information relating to fund managers, "because fund managers have initiated the engagement and are motivated to provide the highest levels of transparency".
However, this model can work in both directions, the research house acknowledged. For example, "when fund managers cease paying for fund ratings on certain funds due to changes in marketing strategy or unhappiness with the rating".
Recommended for you
The Australian Financial Complaints Authority has reported an 18 per cent increase in investment and advice complaints received in the financial year 2025, rebounding from the previous year’s 26 per cent dip.
As reports flow in of investors lining up to buy gold at Sydney’s ABC Bullion store this week, two financial advisers have cautioned against succumbing to the hype as gold prices hit shaky ground.
After three weeks of struggling gains, this week has marked a return to strong growth for adviser numbers, in addition to three new licensees commencing.
ASIC has banned a Melbourne-based financial adviser who gave inappropriate advice to his clients including false and misleading Statements of Advice.
