New York, NY - Close to 60 independent research firms have been financial beneficiaries of the Global Research Analyst Settlement, with less than a half dozen firms receiving the lion's share of the payments.
Unfortunately for many of these firms, the end of the Settlement is rapidly approaching (August, 2009) and most participants are desperately trying to find ways to offset the loss in revenue that is likely to occur at that time.
One firm that did quite well in the Global Research Settlement has taken an unusual approach to addressing this problem. London-based IIIR, has decided that the best way to generate more revenue from its investment research is to give away its research reports.
In the past few weeks, IIIR has made its fundamental research reports on close to 400 international companies available to investors free of charge if they register on www.researchoracle.com. The firm is now trying to build up the website's traffic with the ultimate purpose of selling advertising on the site. The increased traffic is likely to come from getting brokers to link to the site.
In addition, IIIR is advertising its other research services to readers on Research Oracle, including its global IPO subscription service, Global Equity Offerings (GEO) Monitor, and a new research service on Indian stocks.
However, we were initially skeptical when management at IIIR explained their plan to us. After all, why would clients -- particularly institutional investors -- be willing to pay for research that is offered free to the masses? Hasn't this been one of the problems facing the sell-side in recent years?
The answer is simple. Buy-side investors would not pay for the research reports, but rather to access to the intellectual expertise of the firm. This includes access to short-term trading strategies, access to IIIR's analysts, access to IIIR's financial models, access to company management, and access to custom research.
IIIR's new business model is consistent with various trends we have seen in recent years where the buy-side has sharply decreased the value they attribute to sell-side research reports. In its place, buy-side analysts and PMs are paying for access to company management, access to analysts, access to sales coverage, and access to conferences.
Of course, this step is a rather bold one as no alternative research provider has tried to give away its research in an effort to generate advertising revenues. Nor has an independent research firm ever tried to segment its research offering by trying to sell access and give away their reports.
Despite this, it just might work. After all, institutional investors have made their preferences known time and time again. Individualized expertise is much more valuable than standardized research. The research report really has become merely an advertisement for a research provider's real asset -- the knowledge and relationships of their analysts.
The following is the Press Release for this new offering.
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3 March 2008
Independent International Investment Research plc
(“IIR”)
Launch of free-to-view equity research
IIR today launches The Research Oracle™, a new free-to-view equity research portal, which is available via www.researchoracle.com The Research Oracle will provide investors with free access to our institutional-quality research on over 400 global companies and represents an important evolution of the business model in the equity research industry.
IIR research will be published simultaneously with its publication on Reuters, Bloomberg, Thomson, Capital IQ, Factset, Jaywalk and our other distribution channels. Users can set up alerts to know when an update is published on a company of interest to them.
IIR is the UK’s leading source of truly impartial research and strategy for global equities and currencies for broker-dealers, investment banks and asset managers – worldwide.
The company is headquartered in London and traded on AIM (LSE: IIR.L). The Group has no research conflicts – we are not brokers, investment bankers or asset managers. IIR’s research activities are regulated and authorised by the FSA and registered with the SEC. IIR is completely independent and does not conduct any company-sponsored research.
Our research is focused on the delivery of a true picture of risk and reward, where investors want to buy overseas shares and need to know both about company fundamentals and about the currency risk – or possible upside – they are engaging.
You can find an independent assessment of our Global Research performance at:
http://www.investars.com/bvic_universe.asp?coveragematch=0&AlgorithmID=4&RegionID=4&period=1&NumOfPositions=4&index=0&Trusted=1&itime=0&SearchID=0&imageField.x=73&imageField.y=13
Click on the following link for a complete list of companies we cover: http://www.iirgroup.com/products/GER/researchuniverse/
If you would like to bring our research to the attention of your own website audience, please feel free to download and embed our standard links which are available at www.iirgroup.com/index.php/researchoracle/link
-ENDS
Posted at 05:54 pm by mwmayhew
