Key decision makers in advice, funds research and investment product design discuss the challenges and solutions ahead for the research industry to navigate conflicted business models in the creation and dissemination of high quality, timely and independent insights that help advisers satisfy their obligations under FASEA’s Code of Ethics and to clients.

  • Consideration of vertically integrated products – what is the researcher’s role?
  • Pay for ratings – a broken model?

SPEAKERS:
Bronwen Moncrieff, general manager and head of research, Zenith Investment Partners
Matt Olsen, head of research and retirement income, IOOF
Cassandra Crowe, head of consultants Australia & New Zealand, T Rowe Price
MODERATOR: Matthew Smith, Conexus Financial

Key takeaways

  • While managers will never advertise or publicly declare a bad rating for one of their funds, there is acknowledgement from investment and research houses alike that negative fund ratings can be just as valuable as positive ones. According to trillion dollar global asset manager T. Rowe Price, any input they get – good or bad – from researchers is considered valuable information.
  • Zenith “won’t rate everything”, according to Bronwen Moncrieff, who rejected the idea that ratings houses have a responsibility to rate funds that don’t pay for it.
  • Funds may also choose to ignore or hide a poor rating, but Moncrieff pointed out that the rating still is still there for all to see. “It’s on our website so there’s no escaping it,” she said.
  • Asked whether she thinks advisers understand the protocols behind the research house process, Moncrieff said it was clear from Zenith’s perspective. “We’ll spell it out, it’s on our website and not hidden away in six-point font in a disclaimer,” she said.
  • Where researchers can provide extra value to advisers and the industry is through education. It’s an area Zenith is “passionate” about, Moncrieff said. “We’re very much aligned with our clients in providing that across the board.”
  • According to Crowe, education pieces from researchers are “absolutely” helpful in getting information out to clients.

Poll results

How free are fund researchers to express their candid views of managers?

  • Very free
  • Quite free
  • Not free at all
  • It's impossible to tell
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