Mercer targets retail research
Global institutional investment consultant Mercer is looking to increase its competitive presence in the Australian retail research market by leveraging its institutional resources.
Gone are the days when research houses could just hand out passwords – they now need to be proactive when it comes to communicating new opportunities and avoiding the blow-ups, according to Mercer head of wealth management for Australia and New Zealand Brian Long (pictured).
The problem with local research houses is they can’t make money unless they charge for ratings or push product, Long said.
Mercer already rates 22,000 funds through its work in the institutional space, and just needed to map that for dealer groups, he said. “Things happen in insto first, and then they come to retail,” he added.
Specifically, Mercer would be targeting larger dealer groups and private banks. Mercer already provides research for Macquarie’s global business, Credit Suisse, Deutsche and AXA, among others, he said.
Mercer believes its offering is aligned with other large retail wealth managers such as AMP and ANZ, and is in close negotiations with further groups, Long said.
Dealer groups are facing huge issues around consolidation, and if they’re looking to merge, Mercer has experts on product and platform rationalisation who could assist in that overall process, he said.
These kinds of groups also want assistance with platform and product design to help move up to the high-net-worth space, and support for adviser education systems and academies including tools, research portals and webcasts, Long said.
Potential changes to the income tax regime could make it more attractive to invest in overseas domiciled funds if the requirement to pay tax on unrealised capital gains is reduced. This means Mercer would be well positioned to advise on overseas funds that local researchers would not have looked at previously, Long said.
In terms of global resources, Mercer has 19,000 people in 42 countries, 1000 investment professionals in the investment consulting division, 80 researchers and 100 staff in Australia alone, Long said.
Morningstar co-head of fund research Tim Murphy said technology was a key focus in terms of targeting the dealer group market.
“With advisers usually being quite time poor, what they really need are a couple of tools that are simple to use, and give easy-to-understand but powerful output,” he said.
Also important is understanding what advisers need and what is important to them on a day-to-day basis, and being able to tailor your offering to them, he said.
Morningstar also has a large global presence, and Murphy said while a global research partner would help if overseas domiciled funds became more appealing, he expected the take up would be limited.
Lonsec, van Eyk and Zenith could not be reached for comment.
Recommended for you
After seven years at the company, Iress’ chief technology officer for wealth management APAC, Anthony Gerrits, has departed as the firm commences a search process to fill the role.
With advice firms thinking about scaling up in 2025, research has detailed the main avenues financial advisers say they have used for successful recruitment.
The board of Insignia Financial has reached a decision regarding the possible acquisition of the firm by US private equity giant Bain Capital.
Six of the seven listed financial advice licensees have reported positive share price growth in 2024, with AMP and Insignia successfully reversing earlier losses.
