Integrity Research Associates LLC announces a new report reviewing the investment research marketplace during a period of critical change.  The financial crisis of 2007-2009 accelerated structural forces which are impacting the payment mechanisms for research and the market shares for research providers.  Cyclical factors are providing some welcome relief in the short term, but for how long?

The global picture shows divergent trends in the investment research markets between the U.S., Europe and Asia, at least for some segments.  Regulation remains a critical factor for the financial services industry overall, yet its recent impact on investment research is mostly indirect, for now.

Integrity’s Investment Research Special Report analyzes the key factors for growth for investment research and the industry outlook for 2013 through 2017. The report covers the global research industry, and has forecasts by region.  Each report is customized to include market sizing specific to the type of research conducted by the research firm purchasing the report, and includes an hour of access to the authors of the study.  The cost of the study is $1250.

Methodology

Integrity Research calculates institutional spending on investment research by estimating the revenues of research firms and aggregating revenues by type of research services provided. We cross-check our ‘bottom-up’ estimates with ‘top-down’ commission numbers, generated by firms like TABB Group or Greenwich Associates. We also consult with brokers who manage commission payments, such as CSA brokers. In some cases our buy side clients have provided us with detail on their spending by provider, which helps to corroborate directional trends, and relative spending across different types of research.
We pay particular attention to so-called ‘alternative research’, i.e. research which is generally not affiliated with investment banks. There is more transparency around the spending for these types of providers, since they usually charge specific fees for their services rather than relying on commission allocations. Many of these firms are relatively ‘pure plays’, providing clarity for segmentation of spending by type of research.

In formulating our estimates, we try to exclude revenues received by research firms from non-financial sources. For example, for industry consulting firms such as Gartner or NPD, we only incorporate estimates of their revenues from investment managers.

We periodically conduct surveys of institutional investors to gauge their usage of various types of research. Where applicable we have included information from these surveys in this report.

Authors

Sanford Bragg and Michael Mayhew are the authors of the report.  Since the founding of Integrity Research in 2003,  they have been following research industry developments, with particular expertise in the alternative research segment of the industry.   Purchase of the report includes up to an hour of telephone access to the authors to discuss report findings in more detail and answer any questions.

To purchase the report click on the “Buy Now’ link below:

Contents

Introduction ……………………………………………………………………………………………………….…….. 3

Methodology..……………………………………………………………………………………………………………..4

Outlook for Equity Commissions……………..…………..……………………………….………….………….5

Outlook for Research Overall…………………………………………………..…………………………………..8

Outlook for Alternative Research………………………………………………..……………………………..10

Outlook for Research Segments Relevant to Purchasing Firm….……………………………….…14

Conclusion ………….…………………………………………………….………………………………………………..16

Charts & Tables

1. Global Equity Commissions……………..……………………………………………………….………..3

2. Overall Research Spending………….…..…………………………………………………………………4

3. U.S. Equity Commission Rates………………..…………………………………………………………..5

4. Factors Impacting Commissions………………………………………………………………………….6

5. Global Equity Commissions…………………………………………………………………………………7

6. Share of Commissions to Research……………………………………………………………………..8

7. Global Commissions Allocated to Advisory………………………………………………………….9

8. Global Equity Research Spending………………………………………………………………………..9

9. Alternative Research Categories………………………………………………………………………..10

10. Global Alternative Research Spending……………………………………………………………….11

11. Comparative Regional Distribution Overall Research vs. Alternative………………….11

12. Commissions Allocated to Alternative Research as % of Total……………….………….12

13. Alternative Research Spending by Region …………………..…………………………………..13

14. Alternative Research Spending by Region (chart)………………………………………………13

15. Market Share by Type of Research…………………………………………………………………….14

16. Research Segments as % of Global Alternative Research Spending………..…………15