Morgan/Investars Build Research Valuation Tool
Byline: Geraldine Lambe
JP Morgan Investor Services (JPMIS) has joined forces with Investars, a US-based research performance analyst, to develop an integrated equity research and benchmarking tool that will enable clients to determine the value of research provided by brokers."The new product will enable investors to rank the efficiency and efficacy of research from their suppliers," says John Phinney, information products senior vice-president at JPMIS. "Our clients want benchmarks that enable them to measure suppliers against a cost and quality matrix."
Building on Investars's existing Rate of Success System (Ross), the new product will enable users to construct their own universe of suppliers and set the weighting for qualitative and quantitative factors - including pay per portfolio return, earnings per share, accuracy, new issue allocations, timeliness, access to research and communications.
This information will enable the JP Morgan-Investars developed product to create a ranking for each piece of research.
"It rates the quality of the inbound research according to the weightings set by the users and then balances that against how much the research has cost - whether that is by direct payment or a soft-dollar arrangement," says Phinney.
"Clients will be able to see how much value firm A creates for them and to set that against how much it costs them. …