Is Investment Research a Dying Business?
25 April 2013:
The sell side had been providing equity and fixed income research to the buy side for as long as anyone can remember. Faced with a shrinking commission pool, increasing competition, and decreasing product differentiation, however, many sell-side firms are asking if there still is value in the investment research business. According to Indy Sarker, managing director, ANALEC, the economics of the business are increasingly removed from the realities of the marketplace, as the capacity for coverage is vanishing. The cost for a single analyst to cover just one company, he says, can run as high as $60,000 a year. But marrying investment analytics with technology as a delivery mechanism can provide a solution, Sarker adds.
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