The stock research business is getting battered in 2018 — and it's especially bleak for one type of firm
- Equity research firms have seen revenue slashed in 2018, with some experiencing drops of as much as 60%.
- The catalyst for the decline is sweeping European financial reform that went into effect January 3. Though the rules originated in Europe, they're having a global impact.
- For global banks, where research isn't a profit center, falling revenue isn't a giant concern — at least not yet.
- For struggling specialist and domestic firms without diversified revenue streams, the decline poses a more existential threat.
- Some boutiques have capitalized on the new environment and have outperformed top-tier banks.
Some of the top equity-research shops in the world have seen revenue decline by 10% to 30% this year — and those are the lucky ones.
Others are staring at declines of as much as 60%, according to figures from the consulting firm Oliver Wyman.
See the rest of the story at Business Insider
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