All Research is Paid For

Since 2003, Fundamental Research Corp, has covered over 280 public, and 120 private companies under an issuer paid model.

It is our belief that research has always been ultimately issuer paid.  What we mean by this is that research is a cost center for brokerage firms.  While trading commissions the research generates contributes to the cost, by and large, many firms make the bulk of their money collecting fees from issuers doing financings, and part of these fees pay for research.

If an analyst has a negative rating, or target price on a company below what a firm is raising money at, the money does not get raised and the firm collects no fees.

We believe that by charging issuers directly for coverage, the transaction is more transparent, and collecting the fee upfront, allows the analyst to be independent.

Traditional models of research are becoming even more difficult since the introduction of MIFID II in Europe.  The impact of this is that institutional investors must now pay hard dollars for research as opposed to getting it for free in exchange for placing traders with the research provider.  The exception to this issuer paid research.

The impact of the above is that smaller cap firms generally do not get coverage, and things are only going to get worse.  Even when they do get coverage, the number of investors who will have access to the report is limited to the brokerage firm’s clients.

Academic studies have shown that research is the best way to get information about a company to investors.

Fundamental Research Corp solves the problems mentioned above by directly charging issuers a fee for coverage, and getting that research into as many investors’ hands as possible through our global distribution network.  To learn more about how coverage will benefit your firm, visit us at

This story was written by Brian Tang and featured in Service Providers magazine.