The Association of Independently Owned Financial Planners (AIOFP) intends to roll out an independent research facility to its members after becoming fed up with existing services provided by mainstream research houses.
The research house environment was currently riddled with conflicts, inefficiencies and an “all care and no responsibility” culture and attitude, AIOFP chief executive Peter Johnston said.
“We are tired of the mainstream research houses continually stuffing up – Lonsec, van Eyk, all of them. They’ve all given us bum advice in the last couple of years,” Johnston said.
“So we are looking at a different strategy using an independent panel of analysts to actually design a recommended list for us.”
AIOFP will hire around four to five analysts to make up the independent research panel, Johnston said.
The association expects to provide the research facility to its membership, comprising 170 practices and representing 2200 advisers, by the beginning of the second quarter of 2009.
Research should be the most revered, untainted and uncompromised component of the financial services industry, but that was currently not the case, Johnston said.
Zenith Investment Partners director David Wright said it would be a lot easier for the financial services sector to determine whether research houses actually added value through the services they provided to investors in the near future.
“There’s going to be a massive dispersion in returns between managers,” Wright said.
“I think all of us will actually welcome that because it has been difficult to demonstrate that we’ve added value through the selection and the different rating of funds.”
van Eyk managing director Stephen van Eyk said the pressure would be on research houses over the next few years as the performance difference between the best and worst manager dramatically changed.
