Under the bonnet of fund research agencies: FE


We continue our series profiling the main UK fund research agencies with a look at FE; the most popular among advisers.

According to our research, 61 per cent of advisers use research agencies to inform their fund selection process, of which a huge 80 per cent use FE through one of its two adviser propositions: FE Analytics and FE Trustnet.

FE Analytics is paid-for software designed to help advice firms with their centralised investment propositions by integrating research, portfolio construction, due diligence and monitoring tools all in one place. FE Trustnet, meanwhile, is a free source of online investment data, news and research.

Most agencies provide some elements of fund research for free. But our data found 66 per cent of advisers that use these solutions pay for some form of service, including the ability to access richer data and more detailed qualitative research, from at least one of the main players.

Of these, 60 per cent use FE Analytics, making it the most popular in the paid-for space more specifically too, well above its closest competitor Morningstar at 25 per cent. FE puts this down to a client base of more than 3,000 firms.

Its strong suite of ratings services aims to cover all the research needs of advisers. It includes purely quantitative ratings, an approved fund list with a qualitative overlay, more specific fund manager ratings and risk scores.

The company has clearly been successful at attracting advisers to this one-stop shop solution, winning yet another accolade of being the top choice for those that use one research agency alone, according to our data.

That said, the reliance on FE’s research exclusively has declined over the last couple of years, as the general trend to source information from multiple agencies increases. Indeed, while 46 per cent of advisers using such solutions would rely on a single one two years ago, that figure stands at just one-third today.

Clearly this does not support the FCA’s comment in its asset management market study that advisers may restrict their research to funds that have a rating from one agency.


FE is also building a presence in the outsourcing space through its FE Invest model portfolios, which it is working on making more available on adviser platforms.

The portfolios, provided by the regulated entity Financial Express Investments Limited, are built using the FE Invest Approved List of funds, extending the influence of its ratings.

While UK born and bred, FE does not hide its global ambitions, having already launched the FE Trustnet proposition (including access to the quantitative FE Crown ratings) in Hong Kong and the Middle East.

This serves as proof research agencies offering a quantitative methodology that is efficient and repeatable find it easier to export their ratings.

In our categorisation of the market, we see FE as a “generalist” proposition because of its international reach, as well as the fact it looks to build an influence beyond the adviser market with self-directed investors too.

With leading direct platforms such as Hargreaves Lansdown and Interactive Investor not featuring third-party ratings within their fund search tools, research agencies certainly have greater influence over the advisory market than over self-directed investors.

However, we see players in this space increasingly looking to build awareness of their wares with the end investor.

Rodolfo Crespo is senior analyst at Platforum

For more information on Platforum’s The Influence of Research Agencies report, contact rodolfo.crespo@Platforum.co.uk



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