Description: The Problem For decades, sell-side equity research has dominated the global investment research market. Sell-side firms, by the name itself, means, are the firms that are involved in the creation, promotion, and selling of stocks and other instruments to the public market. They mostly make money by brokerage and commission income;
For decades, sell-side equity research has dominated the global investment research market. Sell-side firms, by the name itself, means, are the firms that are involved in the creation, promotion, and selling of stocks and other instruments to the public market. They mostly make money by brokerage and commission income; thus, it is evident that the core function of a sell-side firm is to simply promote the sale of a stock rather than provide any sort of objective advice.
The problem is magnified when these sell-side firms do not cover small and medium-capitalization companies. As a result, Small and medium-capitalization companies lose out on unlocking their true value, while investors lose out on attractive investment opportunities.
It’s high time that this practice should change.