Expert Networks Tell All at Investorside Conference


New York – Last week, the Investorside “Independent’s Day” conference was held at the Bloomberg offices in New York. The Investorside Research Association is a non-profit trade association of investment research providers that have no investment banking conflicts.

The event was well attended, with over three hundred in attendance. There were many excellent presentations and panel discussions. One of these was a panel on the expert network space. The panel was moderated by Bruce Fador of Decision Resources and the panelists were Anne Maffei of Vista Research, Dimitri Mehlhorn of GLG and Kevin Coleman of Coleman Research.

David Teten, of Teten Advisors, wrote an excellent review of the segment.

The conversation revolved around three main topics/themes: product diversification, client diversification, and compliance.

A discussion of client diversification alluded to the expectation by clients for a very quick turnaround in sourcing and access to appropriate experts. Anne Maffei indicated that clients were often expecting turnaround times of 3 to 4 hours.

The turnaround time aspect of the business further differentiates the two predominant styles of providing experts to clients. The first style includes, the GLG, Vista and Coleman method of having armies of vetted experts to call upon at a moment’s notice. The second is more akin to custom recruiting of experts, which takes more time and effort to locate and vet. Certainly the second process is much more time consuming, but has a lower cost structure and serves that part of the market that does not require lightning fast response times.

Product diversification was another discussion point, as the expert networks work to utilize their resources to provide other services in the primary research space. Vista noted that they are using their resources to offer teleconferences, polls and maintain time series data of studies. While the ENs cannot keep the data from expert consultations, they can collect, collate and analyze data from regular surveys and panels of their experts. All the firms confirm that they have been developing services in these areas.

Another area where the expert networks are focusing on is the corporate market. In total, Gerson believes the total potential for expert networks is about $30 billion, especially when one includes the huge group of consultants that service the financial services and corporate segments of this industry. That is why GLG has signed agreements with consulting firms like IDC and Frost and Sullivan to extend their expertise to existing and prospective clients.

Compliance is a major issue with the expert network space. While all firms on the panel have extensive compliance policies and procedures, Gerson indicated that it has put an exhaustive and expensive system in place. According to Dimitri Mehlhorn, GLG keeps track of 13,000 entities including their subsidiaries and affiliates to keep track of company policies, do-not contact lists etc.

Anne Maffei said that Vista as each expert to confirm that they have no conflict with the topic or client, agree (re-attest to the terms and considitions that they have already singed, have taken the online training and that they are still at their current employer prior to being given the consultation. This has become a standard practice for most expert networks.

Kevin Coleman indicated that they have a dedicated team to make sure that the expert is properly categorized with respect to permissible consultations.

As the market for expert networks evolves, the distinction between ENs and other forms of primary research will continue to erode, alongside the encroachment of the expert network model within the corporate segment (as well as the financial services segment).

We also believe that the expert network space will be very active in the M&A arena, with transactions taking place between existing ENs in the market and non-traditional service providers in the consulting and primary research space.


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