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Independent Research- What the future looks like?
Matt Ober
September 27, 2023
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Independent research is a great service in the financial industry, but so tough. I constantly get the question- what do people pay for independent equity research or macro research or everything in between? Is it valuable?
Independent research is a tough business. For many years I witnessed the meetings where it was the first thing discussed when contemplating reducing spend and trimming the budget. Is it worth it? What other service do they provide us besides research? How many people are using them? Corporate access? Do they come to the office regularly? Do we get data from them? Do they help us with actual trade ideas? Are the ideas unique? Where are they distributed or is it only consumed by a small audience? Who else do we know that pays them?
I have seen research providers get paid anywhere from $6k a year to $800k+. It really depends on how valuable all their services combined are. It also depends on the team. The team is everything! You can say this about most businesses, but in research, I think it’s even more important. The best independent research providers are securing top talent and figuring out how to monetize everything they have to offer.
I say Independent Research is a tough business especially when selling to hedge funds, because research in general is a tough business. That being said, the top talent is still always worth paying for. The teams that can produce the best content, offer data products, and have value add additional service offerings are always going to thrive.
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