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Press ReleaseSpending on Sell-Side Research Projected to Fall 28 Percent in Next Five YearsDARIEN, Conn., Feb. 24, 2006 -- Institutional investors are projected to spend almost $3.9 billion on sell-side equity research in 2009 - a decline of more than 28 percent from the $5.4 billion that was spent in 2004.This forecast is included in a newly released research report titled the "2006 US Equity Research Industry Outlook," written by Integrity Research Associates, LLC. This comprehensive 325-page report describes the key developments in equity research during the past decade; analyzes the forces behind these changes; outlines the most critical challenges facing the three major sources of equity research - sell-side firms, buy-side firms, and independent research firms; and forecasts the market's growth over the next five years. Also included in this year's report are concise one-to-two-page profiles on nearly 200 of the most prominent independent research providers in the marketplace today. "One of our key findings is that the equity research industry is undergoing a sea change, and this trend is likely to continue for the foreseeable future," notes Michael W. Mayhew, CEO of Integrity Research Associates. "Our analysis shows that sell-side research, produced by Wall Street investment banks and brokerage firms, has seen its heyday." Along with projecting a steep decline in research revenues over the next few years, Integrity estimates that sell-side firms will see their share of the equity research market drop from 58 percent in 2004 to 33 percent by 2009, reflecting gains in the buy-side and independent research segments. Mayhew explains, "Sell-side research will lose market share in the coming years as institutional investors are forced to rely more on their own internal research capabilities, and as falling commission rates undermines the economics of the sell-side research business. In addition, the recent deal between Fidelity and Lehman Brothers to unbundle research from execution, and the FSA's new rules on commission transparency, will prompt asset managers to take a hard look at what research they are using and how much they are paying for it." Integrity Research Associates, LLC, is the premier ratings, analysis, and consulting firm for the equity research industry. Integrity publishes syndicated research reports; provides an online database of research firm reviews, analysis, and ratings; and offers consulting services to banks, money management firms, broker/dealers, and hedge funds. For more information on how to purchase this research report, go to http://www.integrity-research.com/2005erio.html. Press Contact: Michael W. Mayhew Integrity Research Associates, LLC 888-757-4011 Michael.Mayhew@integrity-research.com |
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