The world of investment research is undergoing an upheaval. Investment banks are being forced to decouple their research from their corporate advisory business to avoid conflicts of interest. Modern technology is providing new ways of formatting, distributing and analysing reports. Meanwhile, the volume of research information continues to grow exponentially, with tens of thousands of reports published each week. To help buy side firms navigate through to the data they need, a number of organisations have appeared that are using technology to gather and redistribute data from many sources, often providing tools for analysing and managing the information as well.
London-based Researchsummary is an online portal where multiple brokers can publish their research which investors can access through a single interface. So far, Researchsummary has signed up 11 investment banks and brokers including Bear Stearns, UBS Warburg, Credit Lyonnais Securities and WestLB Panmure, which provide information covering 15,000 companies worldwide. Researchsummary also offers a number of tools for searching and comparing the documents, exporting the information to other applications, and integrating it with internal research. The data comes in two formats - PDF (portable document format) and RIXML (Research Information eXchange Mark-up Language), which is a new research format standard.
One of the problems with research is that most firms have their own proprietary systems for distributing information, often using word processor or PDF formats that have no standardisation or poor tools for navigation. Handling the various sources of information can be complex and costly for investment firms, while their inconsistent formats make it difficult to extract, compare or collate information, or to automate any part of the analytical process. To overcome this, a number of buy and sell side organisations and computer experts recently developed RIXML as an open standard specifically for the electronic presentation and exchange of investment research.
RIXML uses a system of tags to mark and describe elements of a research report, making it easier to categorise, store and interrogate the documents. The standard is useful for the producers of research, enabling them to standardise their output and to conform to compliance and other requirements. A number of investment banks and securities houses, such as Bear Stearns and UBS Warburg, are already adopting the standard and promoting it in the industry, supported by the independent online research organisations like Researchsummary. However, to take advantage of RIXML, buy side firms must acquire the technology to read, store and manipulate the format. While most major sell side firms are expected to be producing RIXML-compliant research by the end of the year, it will be some time before buy side firms catch up, says Massachusetts-based market research organisation TowerGroup.
Like Researchsummary, New York-based Thomson Financial is beginning to adopt RIXML into its products. It is an option in its First Call Analyst, a service that enables firms to combine their own research with content from Thomson’s many corporate and market data services, such as I/B/E/S, Datastream and Worldscope, and also provides tools to help manage and analyse the data. The latter include tools for screening, charting and publishing information internally, as well as exporting it to other applications such as spreadsheets. Last year, Thomson launched a service called Nelson MarketPlace aimed at giving institutional investors insight into their market, with data on firms such as assets under management, net investment flows and client numbers and types, and detailing links between sponsors, consultants and managers.
New York-based Multex provides not only a portal for the aggregation of investment information, but also offers its technology to sell side firms to create their own online distribution services. Multex’s own service includes aggregated research, morning notes and earnings estimates covering more than 25,000 companies, while it hosts proprietary online research services for firms such as Credit Suisse Asset Management, Scottish Widows Investment Partnership, and most recently Morley Fund Management, the UK-based asset management arm of insurance giant Aviva.
Multex also operates TheMarkets.com, a portal established by a number of buy side firms, including Goldman Sachs, Merrill Lynch and Deutsche Bank in 2000. It provides a single gateway to the members’ research, with straight-through connections to the individual firms’ proprietary content, which remains on their own sites. Recently, the members co-operated to create a proprietary financial estimates service based on the reports of their top analysts.
Other online research sources include Connecticut-based FactSet Research Systems, which provides global financial and economic information, including fundamental data, as well as the tools to download, combine, and manipulate the data for investment analysis, and BNY Jaywalk, a subsidiary of BNY Brokerage which offers an aggregation of reports from independent research firms, and allows users to select only those elements of the reports they wish to access.
If RIXML or similar standard takes off making it easier to format and distribute research information, it is likely that more proprietary and independent services will appear in the coming years, if not months.

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