In finance, intermediated research is a type of

fundamental analysis Fundamental analysis, in accounting and finance, is the analysis of a business's financial statements (usually to analyze the business's assets, Liability (financial accounting), liabilities, and earnings); health; Competition, competitors and Ma ...

investment analysis In finance, valuation is the process of determining the value of a (potential) investment, asset, or security. Generally, there are three approaches taken, namely discounted cashflow valuation, relative valuation, and contingent claim valuatio ...

of a business to establish its value for

investors An investor is a person who allocates financial capital with the expectation of a future return (profit) or to gain an advantage (interest). Through this allocated capital the investor usually purchases some species of property. Types of in ...

that attempts to avoid commercial pressure or influence. Many banks and

broker A broker is a person or entity that arranges transactions between a buyer and a seller. This may be done for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither ...

s provide research to the investment community, however this form of research suffers from a real or perceived lack of objectivity. For example, this research may be subject to influence from within a bank from, say, investment bankers keen to win company’s

IPO An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment ...

mandate. An alternative form is known as ''

independent research Independent study is a form of education offered by many high schools, colleges, and other educational institutions. It is sometimes referred to as directed study, and is an educational activity undertaken by an individual with little to no supervi ...

'' or ''alternative research'', this is research that is not provided by a bank or broker. However, someone has to fund the costs of conducting the research, and when the funder is the company being researched, this form of independent research is termed “ sponsored” or “company-paid” research. Unfortunately, with the subject company paying directly for these services, this form of research suffers from a real or perceived lack of objectivity, which reduces its value to

and hence to the companies themselves. Intermediated research improves significantly upon the sponsored research model, by introducing important safeguards into the commercial and research process framework. The key structure is that the company has no choice in its allocation to a research provider; once matched with the research provider, the company is under a long term contract in order to minimize commercial pressure or influence; and the fees paid to the research provider are not sufficiently material for the company to be able to exert any influence over the content or conclusions of the

research report A research report is a publication that reports on the findings of a research project. Research reports are produced by many sectors including industry, education, government and non-government organizations and may be disseminated internally, or ...

. Collectively, these measures enhance the value of the report to investors and consequently, to the company itself. The intermediated research framework includes the further protections; ensuring that the independent research firms involved have no

investment banking Investment banking is an advisory-based financial service for institutional investors, corporations, governments, and similar clients. Traditionally associated with corporate finance, such a bank might assist in raising financial capital by und ...

brokerage A broker is a person or entity that arranges transactions between a buyer and a seller. This may be done for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neith ...

operations in their

business model A business model describes how a Company, business organization creates, delivers, and captures value creation, value,''Business Model Generation'', Alexander Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self-pub ...

s; conduct no traditional company-paid research; deliver a standard template for analysis of every company so that all standard topics are covered; and avoiding ratings and target prices in the reports, since these can risk becoming a focus of pressure exerted on the research provider by the subject company.

References

{{reflist Research methods Valuation (finance)