But for an individual investor, managing a portfolio that will finance a child's college education or fund a much-anticipated retirement, it is the quality of an analyst's research that counts. Indeed, access to quality research remains one of the best reasons for trading with a full-service brokerage firm. Even some people who do most of their investing through discount firms continue to make at least a few of their trades through full-service brokers in order to retain access to research they value. Yet individual investors traditionally had little opportunity to compare the quality of research from analyst to analyst or firm to firm. It is a massive project.
Some errors are almost inevitable in a statistical project of such magnitude.
But Zacks and the Journal go to great lengths to ensure that the rankings are based on accurate numbers. Mergers, acquisitions and reorganizations in the securities business made it hard to keep track of the players without a scorecard last year. Many analysts weren't eligible for the All-Star survey because they changed jobs in 1997. Rick Chrabaszewski, manager of broker relations at Zacks, says he wouldn't be surprised if 500 analysts changed jobs in 1997, compared with the 200 to 300 he estimates typically switch firms a year. The turmoil in the securities business has continued this year.