New-look research strives for clearer view
Investment banks are turning to new research strategies as they fight to win back investor confidence and wash away the stigma of bias and conflicts of interest that have tarnished sell-side research in recent years. There appears to be a stress on intellectual honesty but can this coexist with turning a profit?
|Trying to erase the taint of bias and conflicts of interest that have dogged sell-side research in recent years.|
CORPORATE PENSION FUNDS are wasting money investing in the stock market. That's the conclusion Stephen Cooper and David Bianco reach in a report they published last month entitled Should pension funds invest in equities? Or, to add a small caveat, that's the conclusion they reach for companies with defined-benefit pension plans to manage.
It's a valid and contentious topic. And this is the sort of research you'd expect to see being published by consultants or academics. But the authors of this report happen to be research analysts at UBS, an investment bank that has one of the dominant equities franchises in Europe and Asia and is trying to build a similar platform in the US.
Here are two of their own recommending that a large section of UBS's clients avoid precisely that product, and avoid it for good. That's a lot of potential commission and trading revenue the bank might lose out on.