There is little movement in terms of research contract tenders while the market waits for consolidation to ease, according to Richard Everingham, general manager of strategy and development at Lonsec.
“On the research front, there’s been no major activity from the big players over the last few months; most of the tenders went on in early 2012,” he said.
“We think what we’ll see is further consolidation and maybe in 2014 there might be some action in terms of our business and other research tenders.”
In particular, there could be some more movement in terms of the dwindling mid-tier dealer group space, Mr Everingham said.
In the short term, Lonsec is turning its focus increasingly to listed investment research, with Mr Everingham highlighting increased interest from investors since the global financial crisis in listed assets such as equities, exchange traded funds (ETFs), listed investments companies and hybrids.
“I think there are structural and cyclical elements to that [increase]; it’s a long-term trend that’s here to stay,” he said.
Lonsec has responded by beefing up those areas of its research, including a new ETF journal, short-form ETF research, and educational material for advisers’ clients, Mr Everingham said.
There is also a significant shift underway in the post-retirement space which is more complicated than the accumulation phase and is compounded by an underfunding problem, he added.
This has led Lonsec to start a retirement investment advice service and collaborate with Milliman to look at the retirement investment area.
“The other trend we’ve observed is the movement in the advice process from a transactional process to a relationship-based process – a move from product-centric advice to a strategic advice process. The shift is underway – there’s still a long way to play out but it is definitely the way the industry is moving,” he said.
“Researchers have a role to play beyond merely [providing] views on products. Advisers will benefit from further granularity and further information on how to construct portfolios, and clients’ ability to construct certain asset classes.”
