The sale of research group Lonsec has garnered a mixed reaction from within Australia’s licensee sector, with a large number of groups set to remain with the researcher as long as no major changes are made under the new owner.
For a number of groups, the relationship with the former Zurich Australia group has been part of a number of research deals for their individual groups and so the sale is unlikely to have a direct impact.
“Bridges and Consultum both have their own research team that provides investment recommendations to its respective planners,” an IOOF spokesperson said.
“While we have a subscription to Lonsec, it is used by the research teams to supplement their own research. As a result, we don’t foresee this relationship changing.”
A Financial Services Partners spokesperson said as the company used Lonsec as a “secondary research house feed”, the sale to new holding company and SuperRatings affiliated group Financial Research had no major implications on the internal research it provided.
“In line with our current internal procedures, all external research houses are subject to ongoing review,” the spokesperson said.
AFS Group chief executive and managing director Peter Daly said the sale would not affect its relationship with Lonsec.
“We won’t be reviewing our relationship with Lonsec due to its recent sale,” Daly said.
Australian Unity head of financial advice Craig Meldrum said the company began reviewing its research providers four months ago.
The company undertook a review of its providers every three years to avoid getting caught in a “comfort zone”, Meldrum said.
He said Australian Unity had undertaken due diligence on a number of other providers.
While the decision to potentially move away from Lonsec had nothing to do with its recent sale, the fact Financial Research was an unknown entity would no doubt be a factor for some, he said.
He said if Australian Unity did end up moving, it would be because another provider had offered them something Lonsec could not.
Professional Investment Holdings group managing director Grahame Evans said the company would meet with representatives of Lonsec to discuss any ramifications of the sale.
“The meeting is to ensure that the change of ownership does not mean a change in Lonsec’s processes, staffing or business model,” Evans said.
Ferguson Betts director Rob Ferguson said the company did not anticipate any immediate change.
“We would hope the people and processes will remain largely in place. We will wait to see how the new owner ‘adds value’ to their purchase, before making long-term decisions,” Ferguson said.
Madison Financial Group managing director Tony Hartley said Lonsec’s sale was of no great surprise, particularly with merger and acquisition discussions “rife” across all levels and areas of the industry.
“With respect Financial Research, we are not concerned at this moment but will obviously be watchful as to whether research quality suffers, key personnel are lost or indeed if other conflicts arise from the acquirer moving horizontally across the product-service spectrum,” Hartley said.
“Had the sale been to, say, a major insto, we would obviously have been less comfortable. Combining Lonsec’s capability with that of SuperRatings seems to make sense. [Private equity investor Mark] Carnegie’s involvement is intriguing and one would have to think more change is inevitable.”
