FRC founder launches financial consulting firm

Neil Bathon, founder of Financial Research Corp., is launching yet another financial consulting and research firm.

Two weeks ago, he opened the doors to Fuse Research Network LLC. The Boston-based company will compete directly with FRC by offering research and consulting services to asset managers.

“It’s an ideal time to come out with this type of new business,” Mr. Bathon said. “Firms need assistance in determining how their business is going to evolve during this time.”

Mr. Bathon started Boston-based FRC, known for its monthly mutual fund flow data, in 1987. Ten years later, he sold the company to Boston Institutional Services, and four years after that, it was sold to The Bisys Group Inc. of Roseland, N.J.

Mr. Bathon remained as FRC’s president until 2006.

In 2007, FRC was sold to New York-based Citigroup Inc. as part of its acquisition of Bisys.

To help get his latest endeavor off the ground, Mr. Bathon has recruited heavily from FRC. Two weeks ago, Fuse announced that it had hired Michael Evans, FRC’s president, to serve as its president. A week later, it announced that Sam Campbell, FRC’s director of research, had been hired for the same position.

FRC, for its part, is working to fill the gaps left by the departures of Mr. Evans and Mr. Campbell.

“We are looking to fill Mike’s and Sam’s roles,” Ian Rubin, a senior vice president and director of retail investment markets and strategic advisory business, wrote in an e-mail. “The caliber of applicants has been extremely high.”

Mr. Rubin has assumed Mr. Campbell’s responsibilities in addition to his previous ones.

Meanwhile, Bruce Treff, a managing director at Citigroup, in August assumed responsibility for overseeing FRC.

The new firm will likely have an initial influx of business, said James H. Lowell III, co-founder and chairman of The Rankings Service, a Needham, Mass.-based firm that ranks mutual fund managers.

“They have some major players,” Mr. Lowell said of the executive team. “And taking them from a would-be competitor’s team, you get a little bit of an advantage. They’ll be offering new goods with some trusted sources.”

Maybe so. But given the calamitous events on Wall Street in recent weeks, getting asset managers to spend money on research and consulting won’t be easy, said Burton Greenwald, a Philadelphia-based mutual fund consultant.

“It’s a tough time in the industry,” he said. “Nobody is throwing money around right now.”

While Fuse will likely succeed, “I think it will be challenging for a while,” Mr. Greenwald said.

COMPANY STRATEGY

The new firm conducts research and helps clients develop strategies addressing such areas as sales and marketing, organizational structure, sales force training, and screening for potential lift-outs or merger opportunities.

“We are not just interpreting the data, but the analysis will help clients get something done,” Mr. Bathon said. “We are packaging up a higher-value series.”

Like FRC, Fuse will also focus on helping clients improve distribution of their products and services.

“Asset managers have not evolved their approach to sales all that much in the past 20 years, but distributors have changed dramatically,” Mr. Bathon said. “The sales force is used to pushing product.”

But successful distribution today requires a more thorough understanding of the offerings.

Intermediaries “are embracing a model that involves more due diligence and more of a process in that buy-sell decision,” said Mr. Evans. “There is much more of an institutional process that people are going to have to embrace.”

Partnering on research is also on the horizon. Last week, Fuse an-nounced a partnership with Mast Hill Consulting Inc. of Hingham, Mass., to conduct a study of the methods investors use to make choices about retirement planning and products.

Some believe there is a gap in these services.

“There are plenty of voids, especially when it comes to relevant competitive-advantage information, which always requires not just a compilation of reams of data but also the ability to interpret and present judgment for your clients,” Mr. Lowell said.

E-mail Sue Asci at [email protected].