StarMine, a provider of securities analyst ratings, and Cogent Consulting, which supplies broker review and voting systems, have partnered to launch a broker review and commission allocation tool.
StarMine’s analyst performance data will be integrated into Cogent’s ResearchTrak broker review and voting system. “On the software platform, buyside firms will be able to automatically match subjective results on the quality of a broker’s services (from ResearchTrak votes) with objective data on the accuracy of analyst research (from StarMine data),” according to a joint statement from the firms.
Commission allocation is an increasing area of focus among institutions and hedge funds as the Securities and Exchange Commission as well as the CFA Institute (formerly AIMR) in the U.S., and the Financial Services Authority in the UK, continue to clarify soft dollar standards, practices and requirements.
“This partnership provides a unique value proposition for buyside firms,” said Robin Hodgkins, president of Cogent Consulting. “Firms have been eager to embrace broker reviews and research commission allocation, but have struggled with the considerable time required to manually gather data and make side-by-side comparisons between the accuracy of analysts’ EPS estimates and buy/sell recommendations and the quality of brokers’ overall service.”
“Cogent’s customers are ahead of the curve on commission management,” said Ray Letulle, vice president of Business Development at StarMine. “They place a high degree of value on the quality of research and we believe would also benefit from StarMine Professional.”