What’s Best for Your Firm’s Proprietary Research? Weighing the Tradeoffs of Common Investment Research Tools

Your firm’s human capital and intellectual property is what yields your competitive edge. It’s why, more and more, investment managers are prioritizing their proprietary research and investing in technology to support their people and their investment process.

To that end, there are quite a few tools available. When firms engage with us at Verity, many have considered, used, or tried one or both of the following methods.  

• A combination of shared drives and email.
• A notebook approach. Either a mass-market notetaking app or lightweight add-on to a financial platform. 

Investment teams are creatures of habit. Firms are often entrenched in whatever they are currently using. Email and folders have come with nearly every computer they’ve used. For the notebook users, these tools are often add-ons to another tool they are already using.  

Are these tools right for your firm in the long term?  

Because we’ve helped a lot of portfolio managers, CTOs, compliance officers, even founders understand the tradeoffs of the various tools, I wanted to share some insights in this blog post in case you find yourself in a similar position. 

[Related: See the 2024 Guide to Research Management]

Notebooks: Benefits & Drawbacks

What do I mean by notebooks? The notebook can take a few forms. Typically, they are either: 

• A mass market tool like OneNote or Evernote.
• A proprietary notetaking ‘add-on’ within a financial platform.  

Don’t get me wrong: notebooks can make for a useful, lightweight tool for the individual. They can organize and store their research in one location. They can often clip content from other sources and save it in their notebook. The analyst has all his/her notes in one place, and that’s a good thing. 

The challenge, however, is knowledge fragmentation. The analyst’s research insights are too often sequestered in their notebooks. That content can’t easily benefit your portfolio manager’s real-time decision making or your team’s overall knowledge share when it’s disconnected from them. 

Further, not all of an analyst’s IP will take the form of a notebook note. Consider model data, price targets, etc. Best case, this structured data is now unstructured in a notebook. Worst case, you’ve created another data silo at your firm, multiply that data silo by the number analysts across your organization. 

When investment managers engage us on their search for an RMS solution, they usually share one or more of these challenges: 

• Lack of collaboration. 
• Difficulty elevating proprietary insights. 
• Painful manual reporting.
• App switching & data silos – models are in one place, recommendations in another, meetings in another, etc.  

Great for individual productivity, a notebook doesn’t solve any of these scalability challenges in their entirety.  

Email + Shared Drives: Benefits & Drawbacks

Before I get started, I want to be clear that we would never suggest doing away with drives and/or email. Both are essential tools for their purposes: document storage and communication. Both Outlook and SharePoint have come a long way in recent years in terms of user-friendliness, as well as their capacity to integrate with other platforms. 

So, where do these tools shine? And where do they fall short? 

Unlike the notebook, both drives and email offer basic collaboration. These tools tend to work well for communication and document storage too. Further, some firms find the ability for IT to configure, own, and control SharePoint as a selling point. Firms often have a unique process, and only want to store their IP with trusted vendors that understand investment management. Sticking with the status quo of existing tools makes that decision easier. These tools have a lot of inertia; very little decision needs to be made to check the box.  

But commodity tools like these often fall short for investment managers who prioritize their process, have dispersed teams, or are focused on scaling workflow and/or automating reporting requirements. In our experience, the biggest challenge with an email and drives approach to research management stems from who is asked to make those systems work: you and your team.  

• Who needs to remember when and where you or your colleague saved a model or sent an investment memo email? You and your team.  
• Who needs to manually piece together metadata from individual documents to build reports? You and your team.  
• Who needs to scale, configure, and continuously invest in your SharePoint ecosystem to evolve with your investment process? You and your team. 

While these tools can complement a scalable, research management process, they were never intended to solve the problems of modern investment teams. In fact, we find they are best served as core integration points into a modern RMS like VerityRMS.

[RELATED: Why One Firm Ditched Email + Shared Drives for a Dedicated RMS]

Bottom Line 

If you’re considering or using one of these approaches, I would urge you to think about the big picture. How could your process be more scalable? How do your tools stack up?  How much time is spent on admin tasks versus investing and research? Verity works with hundreds of leading hedge funds and global asset managers across the world to scale, streamline, and modernize the investment process. We’d be happy to show you why. 

See How Firms Are Scaling & Streamlining Investment Research

At Verity, we offer the modern research management system trusted by global asset managers. Request your custom demo to explore the possibilities VerityRMS can bring to your process, workflows, and decision-making.