Today’s researchers taking on asset management

Kate Cowling

By

December 7, 2017

Dealer groups will increasingly take on asset management functions as they look to secure their futures and justify their value to advisers, a researcher has said.

In a post-Future of Financial Advice world, the dealer group model is under continual scrutiny from advisers, who expect a return for the cost to their business, Jeff Mitchell, head of investment research at Australian Unity said at Professional Planner’s Research Forum in Sydney.

“One of the ways they’re going to [provide advisers a return] is asset management,” Mitchell said. “For that to be done in a good enough and compliant enough way, there has to be that skill internally.”

He said it is becoming more common for researchers to take on the role of a portfolio manager at a licensee level.

“The dealer groups, I think, are going to be a lot more active in directing how investments are taking place because, ultimately, we’ve got a best-interests obligation and that best-interests obligation feeds back up through the whole research process.”

As such, the relationship between the dealer group and the research house is under a bit of strain, with licensees building out the research skills internally, Mitchell said.

Dealer groups that build those functions improve their value proposition and improve future prospects, he said, but he stopped short of saying those that don’t would become obsolete. “I’m not saying they’ll disappear,” he clarified.

When asked how the role of researcher will evolve, fellow panelist Tim Murphy, director of manager research at Morningstar, and Helen Richardson, an independent investment consultant, said the skillset required of an analyst has already changed in recent years. For example, Morningstar looks for diversity of experience from its recruits, as opposed to hiring graduates.

A member of the audience asked whether the longevity of senior researchers in their current roles made it difficult for more junior analysts to move up. The panel acknowledged that could be a challenge, given the size and specialised nature of the industry.

The Professional Planner Research Forum is hosted by Conexus Financial and Portfolio Construction Forum.


TOPICS:   Helen Richardson,  Morningstar,  Tim Murphy