A double-edged sword

Independent investment research is becoming increasingly indispensable. But it is costly and its real value is open to question

Investment research has grown in stature, importance and, unfortunately, in quantity. Within a context of ever tighter regulation, narrower margins, fiercer competition, globalisation and integration within the industry, it has inevitably become a two-edged sword. Research is as likely to be bad as good. The over populated and overpaid ranks of traditional institutional analysts have a cut and thrust culture, which leads ambitious and inexperienced analysts to seek out a prominent stance or a dodgy call, albeit within the institutional confines. If it goes wrong, there are disclaimers...