Read the report, researchers urge

Use all the tools available

By Julia Newbould
Mon 16 Mar 2009

Research should not be used in isolation to either the sector, the economy or your client's own needs.

Researchers speaking at the Self-Managed Superannuation Fund Professionals' Association of Australia conference on Friday urged planners and accountants to read reports.

"Don't just use stars or recommendations - use the full report," Morningstar head of research Anthony Serhan said. "Otherwise that's the just the thin edge of a very thick wedge of what a research house does."

It was also important to use the other products the researchers offer such as asset allocation, market commentary and special reports, he said.

"You have to use the package and embrace the package if you are going to use a research house. We have recommended property funds but our tactical asset allocation is currently underweight property," Serhan said.

Van Eyk managing director Stephen van Eyk said for the previous 11 months before real estate investment trusts lost their value he had said he did not believe they could go on.

"They were popular as an income provider but they fell 75 per cent. They became used as income providers for people that couldn't afford to lose that money," he said.

Serhan said it was also important to look at the research in relation to the individual client.

"Good securities can make bad portfolios," he said. For example, he said Hunter Hall was a recommended manager but had a small cap portfolio invested in Asia, with 30 per cent in Korea.

"We think that they're smart but would that be appropriate for your client? If your client is building a small portfolio with a small number of funds that's a lot of concentration to be recommending for that sector."

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