NZ-based research options dwindling

Concerns have been raised that New Zealand advisers’ need for research may be growing just at the time it is becoming harder to access.

Monday, February 16th 2015, 6:00AM

by Susan Edmunds

Morningstar has dialled back its New Zealand operation and its website now redirects to the Australian site. Industry players complained this made it harder to compare New Zealand fund managers easily.

Van Eyk and Lonsec have left the New Zealand market.

Morningstar spokesman Philip Gray acknowledged there was no longer a separate New Zealand Morningstar site. But he said customers were not missing out.

“New Zealand investors now for the first time have access to our in-depth analyst research reports on New Zealand and Australian stocks, through a premium subscription, as well as comprehensive stock and fund profiles not previously available through the old New Zealand site. Our quarterly KiwiSaver surveys remain available on the Funds tab. The site includes new screening tools for New Zealand and Australian funds and stocks. These are currently in ‘beta testing’ mode and some teething issues will be resolved in the near future.”

He said Morningstar was still committed to providing products and services to New Zealand investors, financial advisers and asset managers.

Sam Stanley, of NZX-owned Fundsource, said the research landscape in New Zealand had changed dramatically over the past 12 months.

He said Fundsource was stepping up its efforts in New Zealand. “We’re certainly more engaged than previously with fund managers. I would like to attribute that not just to less competition but because we’ve managed to build relationships with the funds management industry. The quality of our research is now recognised. We do benefit from less competition but I think we provide better quality as well.”

Stanley said he expected demand from advisers for Fundsource’s research to build as the FMA stepped up regulatory efforts and advisers needed to prove how they decided who to place client funds with.

Fundsource was also working to attract them, offering cheaper prices to smaller firms. It is launching a new fund analytics tool that would be available from $500 per year, he said. “It’s good for advisers because they’re getting independent research, which the regulator likes, and it’s good for clients because they know there is a lot of analytical rigour and process behind rating these fund managers.”

Some advisers are avoiding the big research houses altogether – Simon Hassan said he and a group of other adviser businesses, known as the Professional Investment Associates, contracted an independent researcher. “We haven’t really felt the impact because the Professional Investment Associates have a guy do research when we feel there is a lack of information from other sources. I suppose research is just business and If there is not money to be made people won’t do it. I definitely see a need.”

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