S&P lays down gauntlet

Standard and Poor’s (S&P) has wasted no time taking up the challenge to its competitors following its purchase of Assirt from the St George bank last week, claiming it would trade on its independence to become the number one research house in the country.

S&P Australia managing director Chris Dalton told Money Management after the group ended months of speculation by announcing the deal that its goal was to become the leading provider of research to financial planners.

While rivals questioned S&P’s ability to live up to its ambition (see page 3), Dalton said: “S&P likes to position itself in markets as a leading provider. Our vision is to establish the combined business as a leading provider of the various services in the Australian marketplace.”

In a thinly disguised dig at competitors, Dalton said S&P would promote its independence as a key selling point to advisers.

“S&P is a truly independent research house. We are not undertaking asset management and we are not establishing a listed investment company, which seems to have been the flavour of the month with research houses over the last 12 months,” he said.

Dalton said Assirt had failed to achieve its potential under St George’s ownership.

“I think St George had indicated the business had been a non-core one and because of that it has not had the priority that the business or the staff would have liked,” he said.

“Assirt and what it does is core to S&P and we intend to invest in the business.”

Assirt has had an unsettled history since it was acquired with the bank’s purchase of Sealcorp in 1998.

It was initially spun out to operate as a separate business entity to Sealcorp, before being wound back into the group. In 2003, the research house was taken out of the Sealcorp fold for a second time to operate under the St George bank’s own investments and insurance arm.

St George general manager investments and insurance Nick Basile said the research house’s performance had lifted in recent times, but acknowledged the group had historically been a loss maker for the bank.

While the terms of the sale are not being disclosed, St George’s wealth management divisions, including Sealcorp and the Securitor dealer group, will take research and fund ratings from S&P as part of the arrangement between the two groups.

Assirt’s financial planning software business is not part of the sale and will stay with St George.

“For us, the time was right, the partner was right and the price was right,” Basile said.

The ratings process used by Assirt would be reviewed by S&P, but no major changes were anticipated in the short-term, Dalton said.

The current head of Assirt, Simon Ibbetson, will join S&P to lead its investment consulting division. Assirt’s Julie Orr will also move to S&P to become its head of data operations, while S&P’s Mark Hoven will head the fund ratings division of the combined group.