TheMarkets.com announced yesterday that over 550 brokers have agreed to deliver their content across the company’s platform. TheMarkets.com is used by over 2400 investment management firms in 51 countries as a platform for distributing research. This high number of brokers was made possible as over the last six month TheMarkets.com has added over 350 brokers to its offering.
One piece of information buried in the story which is most interesting to Integrity Research is the fact that TheMarkets.com “now plans to augment its broker content by adding independent research providers to its platform.” The article goes on to state that the addition of independent research comes on the heels of client requests.
This news is exciting as it shows another example of how valued independent research is among the investment community but it is hardly surprising. In fact, Integrity research conducted a survey in the 3rd quarter of 2009 asking the buy-side about their independent policy research usage. One of the questions in this survey asked respondents how policy research obtained from boutiques compares to policy research obtained from Investment Banks. The results of this question showed the majority of respondents felt that research obtained from boutiques was more valuable than that obtained from the investment banks. 54% answered that it was more valuable or somewhat more valuable, while 41% answered that it was of the same value, and only 4% said it was less valuable.
TheMarkets.com’s addition of independent research to its platform in addition to Integrity’s survey results show the value boutiques provide. Independent providers have been steadily gaining momentum as has been shown in part by the sheer number of boutiques in existence. Integrity Research’s database now numbers over 2,700 firms and we have discussed the trend of former sell-side analysts breaking out on their own in the past. We don’t expect boutiques to ever be the only source for research, and in fact this story is mainly about the growing number of brokers putting their research on TheMarkets.com’s platform, however we do believe that boutiques are increasingly becoming a larger part of the research mosaic.