Even with the heavy regulatory environment created by MIFID II, investment firms still need access to great research.

 

Before you consider hiring a new research provider, here are 7 tips to consider:

 

Tip 1:  Does your firm already have access to a similar resource?

 

Oftentimes, firms overlook the resources they have already paid for.  The fast pace at which firms work makes this is easy to accomplish.  However, if you take a moment to review your current resources, you might an existing provider or service in-house that fits your need.

 

Tip 2:  Can an existing service be remodeled to fit your need?

 

Perhaps you found a service provider that comes close to fulfilling your need.  Consider having an exploratory conversation to find out if there is a way to remodel an existing service to your current request.

 

Tip 3:     Has the provider worked with firms like yours before?

 

It might not be a requirement but, it is a nice-to-have.  If service providers worked with firms like yours in the past, getting them from diligence to delivery should be easier.

 

Tip 4:  Has anyone in your firm used the provider?

 

Do some digging internally to find out if anyone had a relationship with the provider.  Perhaps your PM has worked with the provider at a previous firm.  Get feedback on the previous relationship before moving forward.

 

Tip 5:     How fast is their turnaround for research?

 

This is something firms rarely ask their providers because it is assumed that the turnaround will be quick.  But, by asking, you create a standard that the provider has to meet.  If it is not met, your discussions will be based on the information they gave you.

 

Tip 6:  Do you have a contact beside the research analyst?

 

Sounds 101 but, while the analyst is at work, you might have questions that need to be quickly addressed.  Having another point of contact is obviously helpful here.

 

Tip 7:  Do they have flexible payment terms?

 

In today’s highly regulated environment, flexible payment terms is key to getting providers onboarded.  Soft dollars, trading desk, credit cards, etc. are some options that should be available to you.

 

Do you have other tips?  Feel free to share.

 

Trade well.

 

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