Planners demand quality and user friendliness from ratings houses

Financial planners know what they want from a ratings house and the common starting point is quality research underpinned by user-friendliness. Mike Taylor reports.

The quality of fund company research is the core issue for financial planners in assessing the value provided by Australian ratings houses, according to Money Management’s first-ever Rate the Raters survey exercise directed specifically at dealer groups and financial planners.

The survey, conducted in early July, rated the three most important factors for financial planners as being the depth and breadth of fund company research, the quality of the personnel undertaking that research and the quality and usability of the tools underlying that research.

The message to ratings house companies is that in the minds of financial planners, user-friendliness is the key in circumstances where some 61.6 per cent of respondents said they regarded the quality of research, its coverage, depth and timeliness as essential elements.

At the same time, 52.3 per cent of respondents rated staff stability and quality as being important elements, perhaps explaining why van Eyk Research, which in the months before the survey announced the departure of founder Stephen van Eyk and a number of other departures and hirings, performed below pre-survey expectations.

Reinforcing the degree to which user-friendliness was highly regarded by planners, 49 per cent of respondents described having a good website that was easy to use, contained solid information and strong planning tools as being essential.

Where value for money was concerned, nearly 50 per cent of respondents described it as important but only 26.2 per cent said it was essential.

An analysis of the survey results reveals that Lonsec was marked most highly across what proved to be the key areas for financial planners – quality of research, client service and the usability of its website and tools – something that gave it clear leadership in the race to be named the inaugural Money Management Ratings House of the Year.

Similarly, the survey revealed why Zenith has emerged as a fast-improving ratings business in circumstances where it was exceptionally well marked on client service and well marked on website information and tools.

For van Eyk Research, the survey suggested that it had many clients who were very pleased with its offering.

Across elements such as the quality of website tools, research, asset allocation research, model portfolios and value for money, van Eyk Research rated a higher proportion of ‘excellent’ assessments than many of its competitors.

However, while many respondents regarded van Eyk Research as ‘excellent’ across the key criteria, this was more than offset by those respondents who rated it as ‘poor’ with respect to value for money and model portfolios.