Why do I have to do it myself?

October 10, 2013

 A recent article in The Economist, “Analyze This” (September 21, 2013), talked about pressures in the securities industry on equity research. There, declines in commission levels have made the providers of equity research seek ways to reduce their cost while still maintaining the benefit for clients. At the same time, alternative sources of equity research are beginning to grow, as the article describes, “untainted by the conflicts of interest that the devil banks offering research on clients”.

In addition, the article reports that hedge funds are now using “nontraditional” research, such as on the ground evaluations or satellite intelligence to track the progress of mineral extraction projects in order to evaluate them.

While banks are under pressure to cut the research they provide to their clients, the clients’ demand for such research appears not to have abated. What is that mean for you? It means that if your company has relied on using research from your banks about actual and potential competitors, it is likely that your firm will either (A) the receiving less of this research, and/or (B) may have to pay for it. That in turn means that you may be dragged into supplementing or even replacing this kind of research.

Welcome to your new career