Rate the raters 2013
Money Management asked fund managers once again what they thought about the research houses which rate their products.
Lonsec
One area Lonsec improved on during the last year is transparency, with over 40 per cent of survey respondents deeming Lonsec’s processes above average in this area, as opposed to only 20 per cent last year.
The Money Management Research House of the Year winner for several years running also did well on fairness, staff and turnaround time. With respect to its research methodology, close to 80 per cent of survey respondents ranked it excellent or good.
Mercer
When asked how fair they thought researchers were, fund managers showed a clear preference towards Lonsec and Zenith, though Morningstar and Van Eyk also fared well.
However, while 80 per cent of survey respondents from 2012 thought Mercer’s processes were fair, almost 40 per of this year’s respondents deemed it ‘poor’.
Similarly, around half of respondents rated Mercer’s transparency ‘below average’, while similar sentiment was expressed by fund managers when asked to rate its turnaround time.
However, the research house rated reasonably well with respect to personnel and research methodology.
Morningstar
Most of Morningstar’s results remained steady in comparison to 2012.
However, close to 80 per cent of respondents rated their process as excellent or fair – a significant improvement on 2012, where about 25 per cent of those surveyed deemed Morningstar’s processes poor.
The researcher has traditionally rated poorly on staff and turnaround time, but this year delivered slight improvements on those fronts, which could signal a shift.
In the last year, Morningstar picked up a couple of large contracts, including that of financial planning group WHK in February.
The dealer group’s 140 financial advisers and paraplanners will receive Morningstar’s research on Australian stocks, managed funds, superannuation funds, exchange-traded funds, listed investment companies and income securities – as well as fund and stock model portfolios and regular investment market commentaries.
Van Eyk Research
van Eyk Research had a couple of exciting announcements over the last year, including the launch of a new strategy, as well as the acquisition of New Zealand-based Perpetual companies.
The strategy, which was announced last June and saw the researcher pull its focus away from developed market equities and towards alternative assets, also resulted in a few redundancies.
However, van Eyk announced that the purchase of NZ-based Perpetual companies would increase the firm’s consolidated gross annual revenues by 50 per cent.
Fund managers ranked van Eyk highly with respect to research processes and methodology.
However, fundies were not impressed with its transparency process, with over 40 per cent of survey respondents rating it below average.
Zenith
Zenith seems to be the crowd favourite. While it doesn’t have Lonsec’s or Morningstar’s scale, it rated better than any other company in the space in this year’s survey.
Approximately 95 per cent of survey respondents rated by Zenith regarded its research methodology as excellent or good, while its ratings fairness and transparency haven’t been given a bad mark at all.
Graphs show the company also rated exceptionally well in other areas of the survey.
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