Tips to find the research house for you: Bennelong FM

Selecting a research house to partner with has never been more difficult for advisers as they now contend with an overabundance of choices, according to Bennelong Funds Management.

Stuart Fechner, Head of Research House and Asset Consultant Relationships at the fund manager, said advisers need to ensure the research house and their services align best with their client’s and their own requirements.

“It is essential for advisers to recognise that research houses vary in their approaches to assessing investments and fund managers,” he said.

“Advisers need to investigate deeper than just the fund ratings and consider the underlying methodologies used by research houses, the range of services offered, and the overall fit with their business.

“At the end of the day, it’s about marrying up your own needs and client base with what a research house does and can provide, so that your overall offering and service to your client base is improved.”

Fechner indicated that research houses also have different models they apply to examining funds and investment data, with some taking more of a quantitative approach and others placing more emphasis on qualitative aspects such as investment philosophy and team experience.

The research house specialist also said that the breadth of coverage offered by research businesses may extend beyond fund ratings, depending on the size and expertise of their team at hand as well as their use of technology, with services also including resources on asset allocation, model portfolios and managed accounts.

“While noting the key and core item of a research house is in providing fund ratings and reports, differences exist in terms of related services, information and systems that may be available,” Fechner said.

“Some potential clients may only seek or only need a pure fund rating and reports service, while others may find items such as asset allocation insights or advice regarding building model portfolios or managed accounts valuable to their needs and circumstances.

“It is as important to understand your own needs as it is in understanding what is provided by a research house and the ‘how and why’ that sits behind it. Being on top of both sides of this equation will go a long way in helping to provide an outcome that will add value to an adviser’s business.”

Fechner said the investment needs of clients also play an important part in the research house selection process, as different reporting styles may align better with different clients. The research house expert suggested to advisers that they ask seven questions to understand which research house is best suited to them:

1. What is your investment philosophy and research approach?
2. What are your points of difference and competitive advantages?
3. How frequently do you review and update your information and reports?
4. What is the range of services, information, reports and tools you provide?
5. Do you offer flexible subscription options or a complete package?
6. How does access/subscription work, and is it limited to specific individuals?
7. What are your fees and cost structures?