Great References = Great Results
New York - When hiring new analysts, many financial services companies—as
a matter of process—check references on promising job candidates. When hiring
new research firms, however, most financial services companies do not check
references. In fact, many do very little due diligence whatsoever, and instead
choose to put faith in a firm’s marketing materials and sales pitch.
If checking references on individual analysts is an
important mechanism for determining if a candidate is a good fit, then it
stands to reason that checking references on prospective research firms is even
more important. Hiring a research firm is like hiring a whole team of analysts—timeshared,
of course, but just as critical to a money manager’s investment decision-making
process. When taking on a new research firm, it is important to know that they
have historically been able to deliver insightful research and/or high quality
data. Talking to some client references is a great way to find out.
At Integrity, checking references is a central part of our process for evaluating research firms. When working with a client to find innovative new
sources of research or data, we routinely ask prospective vendors to provide
references for their work. We typically ask references to
provide both qualitative insights on the strengths and weaknesses of the firm in
question and quantitative ratings on specific metrics that are important for evaluating
it (e.g. quality of analysis, turnaround time, etc.).
After years of checking references, we have built up a
significant database of client reference data, which has helped us rate and
rank research providers in a broad range of methodological categories. These
rankings alone are hardly the basis for choosing a provider, but they can
provide some guidance on which firms are widely respected by their users and
which firms are not.
Posted at 09:26 am by William Greene
