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The consolidation within the financial planning dealer group space is a potential concern for research houses over the long-term, but at the moment it's business as usual.
According to the soon-to-be published Money Management Top 100 Dealer Groups survey, a number of dealer groups have switched research providers since 2010 after being acquired by one of the larger institutions.
Commonwealth Financial Planning switched from Standard & Poor's (S&P) to Morningstar, as did the CBA-owned dealer group Financial Wisdom.
Count Financial – which was acquired by CBA last year – had earlier changed its research provider from van Eyk to Lonsec.
In targeting the remainder of the independent financial adviser market, van Eyk Research chief executive Mark Thomas said it was important to focus on dealer groups that have "multiple touch points" with the services van Eyk provides.
"We're not short of people to talk to, we just need to focus our energies in areas where we think there's reciprocal value," he said.
"We sell them research, we do consulting with them and they may use a couple of investment funds in Blueprint, where there are gaps in their approved product lists," Thomas said.
For Zenith Investment Partners director David Wright, consolidation at the industry level is overplayed, and has only affected his business marginally.
He added that Zenith will not change its sales and marketing strategy for the time being.
One of Zenith's clients, Futuro Financial Services, recently sold a 10 per cent stake to AMP, but Wright said it has not affected their current research contract with them.
Moving to the internal research capabilities of AMP may come into play over the long-term when Futuro move towards potential full acquisition, he added.
According to Wright, this period of consolidation is part of a cyclical process whereby the current hold by the major institutions will once again ease, and the "better financial advisers" will once again break away and form their own independent businesses.
"If you look at the industry more generally in terms of who are the potential clients for research houses, the number of clients is shrinking but the size of those clients is getting larger," Morningstar co-head of funds research Tim Murphy said.
Research houses that are able to win those large contracts will be in good stead going forward, he said.
Wright added that the departure of S&P from the market has been helpful to the remaining players who have picked up some of their clients, Zenith included.
"At the margin, subscribing clients are being acquired, but the flipside of that is larger institutions are subscribing for external research in order to satisfy the requirements of the businesses they acquire," he said.
UPDATE: The original version of this story incoorrectly stated that NAB-owned dealer groups Apogee and Godfrey Pembroke had switched research providers from ThreeSixty Research to Lonsec. This was the result of an error in the data provided to Money Management. Apogee and Godfrey Pembroke continue to use ThreeSixty Research as their primary research provider.
