Lonsec general manager for strategy and development Richard Everingham broached the idea at a recent parliamentary joint committee (PJC) hearing in Sydney.
It is “incumbent” on the five major houses – Mercer, Lonsec, van Eyk, Morningstar and Zenith – to form an industry body in order to meet the “expectations gap between research houses and financial planners”, Mr Everingham told the PJC.
The fact that such an association does not already exist speaks to the “intensely competitive nature of the industry”, he added.
Speaking to InvestorDaily, Mr Everingham said a collective voice would have improved the recent consultation with the Australian Securities and Investments Commission (ASIC) in regards to the regulation of research houses.
Morningstar head of fund research in Asia Pacific Grant Kennaway said while his organisation is always “open to discussion with our industry peers”, there does not appear to be a “pressing need for the establishment of a further formal body”.
“The major research houses are already members of existing industry bodies such as the Financial Services Council and the Stockbrokers Association of Australia, which provide valuable forums for the discussion of key issues,” said Mr Kennaway.
van Eyk chief executive Mark Thomas told the PJC hearing that research houses already have “informal gatherings, where we have roundtables and discuss things”.
“We would be favourable to regular communication. Whether that requires a body or not is questionable,” said Mr Thomas.
Zenith director David Wright told InvestorDaily he was open to the idea of a collective body – but any collective association would have to be focused on the “collective good”, with any thoughts about differences in business models “left at the door”.
“Ultimately, research houses do have a common interest: providing accurate ratings on products and ensuring that the information provided is used in the most appropriate manner by advisers for their clients,” said Mr Wright.
