Trading and Portfolio management receive the lion's share of attention while Research languishes in the back room amongst unimaginable piles of papers. These piles represent figuratively and metaphorically the crisis in Financial Research today. Too much, untimely, misdirected and underutilized. Financial institutions, particularly institutions that conduct fundamental research prior to making trading decisions, need to process information in a timely manner. Large firms employ small armies of analysts to collect, collate and disseminate information, combine outside research and produce a recommendations for each institution's appropriate portfolio manager.
Large institutions have several advantages in the process of gathering information.
The largest of institutions can invite companies to visit their in-house analysts directly. Therefore, internal research is one of the most significant competitive advantages for any institutional investor. However, it is only one part of the research process. Large sell-side firms generate research. Their ultimate aim is to generate commission dollars through trades.