Developed over the last 14 months, the Substantive Research Dashboard started as a simple overview of research providers and benchmark valuations of research spend, and has developed into a budget optimisation and research discovery tool. Additional functionality has been added in close collaboration with asset managers, to include analyst mapping, peer group comparisons, budgeting, rate card benchmarking and market trend reports.

Using the Substantive Research Dashboard, asset managers can:
• Track and benchmark price trends on research providers, including the industry rate for analyst calls, meetings, corporate access and conferences to ensure they are paying the right price for the service they require from their providers.
• Understand how brokers and independent providers have grown or decreased their sector teams and to what extent they have “juniorised” certain parts of their offering by replacing experienced with more entry-level analysts. This Analyst Mapping tool (launched in November 2020) enables asset managers to have an aggregate view over analyst moves across the market, evaluate where banks invest or disinvest, benchmark sector expertise gains and losses broker by broker, and ultimately decide how to allocate their research spend in relation to the areas and asset classes relevant to them.
• Crucially, the Dashboard allows buy-side firms to browse the mapped provider list and discover insights on pricing and sector coverage changes for providers and sectors that matter to them, both within and outside of their list. This enables asset managers to recognise new areas of quality and coverage inside and outside their existing research provider list - this is particularly important post MIFID II, as they are no longer allowed to access research that they haven’t paid for.

Mike Carrodus, CEO of Substantive Research, said: “Having worked with clients for three years to ensure our benchmarking methodologies address their specific use cases, it is clear that managers want the ability to combine insights on pricing and coverage with an understanding of how their providers are investing in research quality in the specific areas relevant to them. Our integrated Dashboard allows them to access these insights, to make sure they are paying the right price and also have an up to date understanding of what is happening to the future quality of their research supply.”

The investment research landscape has changed significantly since MiFID II and throughout the Covid 19 pandemic. Using the tools developed in close collaboration with asset managers, Substantive Research has been able to evidence a 12% loss of analysts in Europe vs a 4% loss in the US; a significant impact on research and analyst pricing during the pandemic, with the value of analyst meetings falling by 47%; and a general juniorisation of research, with the global research market losing 7,500 years of experience since MiFID II.

Jon Furse, Substantive Research CTO, added: “It is now more important than ever to have a clear understanding of the research provider landscape relevant to each asset management firm, from seniority to pricing and sector coverage, in order to optimise research spend while also being able to discover new, relevant providers. What we have set out to do, and have now delivered, is a set of tools that provides asset managers with transparency, insight and control to improve their investment processes and performance.”

The Dashboard is already in use with 50 clients; the roll-out to all Substantive Research clients will be completed in May 2021.