van Eyk Advice push receives mixed reception
The upcoming launch of an advice business by van Eyk has received a mixed reception with a planning group questioning the move with another research house claiming it was possible to manage research and advice separately.
Zenith Investment Partners director David Wright said the provision of advice by a research house was possible but would need to be carefully managed to avoid conflicts of interest.
He said precedent existed in the research sector with Mercer offering asset consulting, implemented consulting, research and advisory services to its clients, who are predominantly on the institutional side.
Van Eyk Research currently offers research, asset consulting and implemented services via its Blueprint funds and will expand into advice in the coming weeks.
Wright said the expansion was understandable in a tight business market and that researchers were actively looking for growth areas in their businesses.
"It is hard to operate a sustained research business on adviser subscriptions alone and so we can understand why van Eyk would look to sustain and grow their business. There are possible conflicts of interest but it is a matter of managing them well and openly."
"The model is not dissimilar to what the large institutions and banks offer with their advice and product businesses operating under one brand."
Van Eyk Research managing director Mark Thomas said its new advice business would be treated as a client of the research business and would not receive preferential treatment or pricing for its Blueprint funds and asset consulting services.
Thomas said van Eyk was already experienced in dealing with conflicts of interest through its relationships with dealer groups and had set up separate operational procedures and systems under its new head of advice David Flynn.
"We will be licensing practices under the van Eyk banner — not buying their businesses — which is being conducted under commercial terms with the appropriate due diligence. The van Eyk brand is important to us and we want to protect and maintain that wherever we can," Thomas said.
However Futuro Financial Services managing director Dennis Bashford said his group would reconsider its relationship with van Eyk.
"We believe there may be some conflict in providing advice. We have not acted on it but it will be a topic in a future investment committee meeting. We don't think we will be Robinson Crusoe either in this regard," Bashford said.
Van Eyk has been critical in the past of conflicts of interests among research houses and has questioned the ‘pay for ratings' models used by some of its competitors claiming a subscription model was less conflicted.
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