What Is FactSet?
FactSet Research Systems is a provider of integrated financial data and analytics for investment professionals — including asset managers, hedge funds, investment banks, and corporate finance teams. It consolidates global market data, company fundamentals (public and private), fixed‑income analytics, and portfolio tools into desktop, Excel, web and API products that users can customize for research, portfolio construction, risk management and reporting.
Fast facts
– Founded: 1978 (Howard Wille and Charles Snyder).
– Users: FactSet reports serving over 200,000 users at more than 8,000 organizations (as of 2023).
– Offices: 37 offices in 20 countries (company reporting).
– Client retention: Reported ~95% retention and decades of revenue growth.
– Competitors: Bloomberg, S&P Global, Morningstar.
Sources: Investopedia; FactSet corporate pages.
Key takeaways
– FactSet is an integrated data + analytics platform built for financial professionals who need both raw data and tools to turn data into investment decisions and regulatory reporting.
– It offers desktop applications, Excel integration, APIs, and custom data solutions, and competes on breadth of content and personalization rather than only on price.
– Organizations evaluate FactSet for its data coverage, customization, integration capabilities and client support; onboarding typically includes training, data mapping and governance steps.
How FactSet works — core components
– Data aggregation: FactSet gathers market pricing, company fundamentals, estimates, filings, fixed‑income data, ownership records, pricing reference data and alternative datasets from multiple providers.
– Normalization & linking: Collected data is normalized, cross‑referenced and linked (tickers, identifiers, company hierarchies) so users can query consistent time series and perform cross‑company comparisons.
– Analytics & tools: Portfolio analytics, risk models, screening/screeners, scenario analysis, and custom formulas available via its desktop and Excel add‑ins.
– Delivery: Multiple access points — desktop terminals, web interfaces, Excel add‑ins, REST/enterprise APIs and data feeds to in‑house systems.
– Customization: Clients can build personalized dashboards, formulas and workflows; FactSet Marketplace and partner integrations broaden available datasets.
Sources: FactSet product pages; Investopedia summary.
The company structure and governance
– FactSet operates three regional business units: United States, Europe and Asia‑Pacific, each servicing clients in their respective regions.
– Corporate governance: Board of directors, independent audit/board committees and whistleblower channels (employee hotline) for ethical and accounting concerns.
– Leadership (historical note): Philip Snow became CEO in 2015 and was leading the company as of the 2019–2021 investor literature; review current corporate disclosures for up‑to‑date leadership.
Sources: FactSet Investor Relations; FactSet leadership pages.
Where FactSet adds value (use cases)
– Equity research: Standardized financials, consensus estimates, comparables, valuation models and company filings.
– Portfolio management & risk: Performance attribution, risk decomposition, exposures and scenario/stress testing.
– Investment banking & corporate finance: Comparable company and transaction data, deal modeling support.
– Fixed income: Pricing, yield curves, credit metrics, and bond analytics.
– Quantitative research & systematic strategies: Historical and tick/price data accessible via APIs and data feeds.
– Reporting & compliance: Audit‑ready data lineage, standardized reports, and custom reporting templates.
Practical steps — evaluating and selecting FactSet
1. Define requirements
– List business use cases (research, portfolio mgmt, risk, compliance).
– Identify mandatory datasets (equities, fixed income, private company data, ESG, alternative data).
– Specify integration needs (Excel, OMS/EMS connectivity, data warehouse, APIs).
2. Map stakeholders and KPIs
– Identify end users (analysts, portfolio managers, traders, compliance).
– Define success metrics: time saved per report, improved trade decision speed, coverage gaps closed, ROI targets.
3. Request demos and trials
– Ask FactSet for hands‑on demos tailored to your workflows (Excel add‑in, portfolio analytics, API queries).
– Secure a short proof‑of‑concept (POC) to load a representative dataset and run typical reports.
4. Assess data coverage & quality
– Validate coverage for target markets, historical depth, corporate actions and private company data.
– Request sample data extracts and reconciliation examples versus current providers.
5. Examine integration & deployment
– Review Excel add‑in functionality, API endpoints, data feed formats and SSO/authentication methods.
– Plan for data mapping, master‑data reconciliation, and latency needs.
6. Negotiate pricing and licensing
– Choose the right modules, user tiers and sites; avoid purchasing unused modules.
– Ask about bundle discounts, implementation support and training credits.
7. Validate governance & vendor risk
– Verify data lineage, audit trails, SLA terms, uptime history and security certifications.
– Review contract terms for exit, data retrieval and portability.
Practical steps — onboarding and getting value from FactSet
1. Project kickoff and stakeholder alignment
– Establish project sponsor, project manager, IT lead and lead users.
– Define timeline, deliverables and success metrics.
2. Technical onboarding
– Install desktop/Excel add‑ins and configure user authentication.
– Set up API credentials and secure connections to your data warehouse or OMS.
3. Data mapping & reconciliation
– Map FactSet identifiers to internal tickers/IDs.
– Run reconciliation checks on pricing and fundamental data to establish trust.
4. Build templates and workflows
– Create standardized Excel templates, dashboards and reports for common workflows.
– Automate recurring exports and scheduling where possible.
5. Train users & enable power users
– Deliver role‑based training: analysts (models and screeners), PMs (attribution), traders (real‑time screens).
– Develop a small team of FactSet power users/internal champions to assist colleagues.
6. Measure outcomes & iterate
– Track KPIs (time saved, number of automated reports, reduced data errors).
– Collect feedback and iterate on templates, data feeds and training.
Practical steps — using key FactSet features (by role)
– Investment analyst
1. Install the FactSet Excel add‑in.
2. Pull standardized company fundamentals and historicals into your model (use linked formulas to keep numbers dynamic).
3. Use screening tools to generate comparables and build peer universes.
4. Save report templates for recurring company coverage.
– Portfolio manager / risk manager
1. Upload portfolio holdings (or link to OMS).
2. Run performance attribution and factor decomposition.
3. Use scenarios/stress tests and rebalance analyses to evaluate changes.
4. Schedule automated performance reports for stakeholders.
– Quant researcher / developer
1. Access bulk time‑series via API or data feed.
2. Backtest strategies using normalized price, corporate actions and fundamentals.
3. Validate data quality and set up refresh schedules.
– IT / data engineering
1. Set up secure API access and credentials; map identifier crosswalks to internal master data.
2. Load FactSet feeds into your data lake/warehouse and document ETL processes.
3. Build monitoring for feed latency, missing files and reconciliation alerts.
Cost considerations and pricing tips
– Pricing model: Typically user‑based subscriptions with additional charges for modules, datasets and API/data feed usage.
– Tips to manage cost:
– Only license the modules your teams will use; consider shared seats for occasional users.
– Negotiate multi‑year contracts and volume discounts.
– Use FactSet Marketplace partners selectively; some datasets can be sourced cheaper elsewhere.
– Track active user lists and reclaim unused seats.
Comparing FactSet to competitors
– Bloomberg Terminal: Very broad real‑time market data and fixed income coverage; Bloomberg is commonly viewed as stronger for trading desks and terminal‑centric workflows but at a higher price point.
– S&P Global: Deep credit and ratings expertise; strong for credit research.
– Morningstar: Strong mutual fund and retail investor data; a competitor especially in asset management research.
– How to choose: prioritize your primary workflows (trading vs research vs quant), required data universes, integration needs and total cost of ownership.
Governance, compliance and risk
– Verify contract clauses for data use, redistribution, and retention.
– Use FactSet’s audit/logging features and reconcile external reports to internal controls.
– Maintain an internal policy for vendor data sources and version control for models that consume external feeds.
Checklist — readiness to adopt FactSet
– Business case defined with ROI expectations.
– Stakeholder list and champions identified.
– IT capacity to integrate APIs and data feeds.
– Master‑data plan for identifier reconciliation.
– Training calendario for different user groups.
– Monitoring and reconciliation processes in place.
Frequently asked questions (brief)
– Is FactSet just a terminal like Bloomberg? No. FactSet combines desktop/web apps, an Excel add‑in, APIs and data feeds focused on customization and workflows; it complements or replaces terminals depending on needs.
– Can FactSet replace internal data warehouses? It can be a source for your warehouse but most firms use FactSet alongside internal systems and other providers for redundancy and specialized data.
– Is FactSet suitable for small firms? Yes — FactSet serves a range of clients but modules and pricing should be tailored to avoid paying for unused features.
Conclusion
FactSet is a comprehensive platform for professionals who need integrated financial data and analytics. Its strengths are data normalization, customizable analytics, strong Excel integration and a broad partner ecosystem. Successful adoption depends on clearly defining use cases, carefully scoping data and integration needs, negotiating appropriate licensing, and investing in onboarding, data governance and training.
Sources and further reading
– Investopedia — What Is FactSet? (source URL provided)
https://www.investopedia.com/terms/f/factset.asp
– FactSet — Contact FactSet; FactSet Partners; Open: FactSet Marketplace; FactSet Locations; Why Choose FactSet?; Our Leadership
(company pages; search via factset.com for each topic)
– FactSet Investor Relations — Board of Directors; Committee Composition; 2021 Sustainability Report
– Crunchbase — FactSet: Summary
(If you want, I can: 1) build a one‑page decision matrix comparing FactSet to Bloomberg/S&P/Morningstar for your specific use case, 2) draft an RFP template to send to FactSet and competitors, or 3) outline a 90‑day onboarding plan tailored to your team.)
Additional sections and practical steps
Products and services overview
– FactSet Workspace / Terminal: Integrated desktop and cloud platforms that combine market data, company fundamentals, analytics, screening, charting, and research tools.
– Data feeds and APIs: Bulk data delivery and programmatic access for quantitative models, risk systems, and proprietary databases.
– Portfolio analytics: Performance attribution, risk analysis, benchmark comparison, and reporting tools for portfolio managers and allocators.
– Research and content: Company filings, estimates, news, ownership, supply chain, ESG metrics, and alternative data from multiple providers.
– Custom data solutions and consulting: Tailored feeds, model integration, and managed services to fit large firms’ workflows.
(Source: FactSet corporate pages; Investopedia)
How different users typically use FactSet — examples and step-by-step workflows
Example A — Equity research analyst preparing a coverage note
1. Define scope: industry, coverage list, time horizon.
2. Use FactSet screening tools to assemble a comparable peer set by industry, revenue, market cap, and region.
3. Pull standardized financial statements and consensus estimates into an Excel template; reconcile differences across data sources.
4. Calculate valuation multiples (PE, EV/EBITDA), growth metrics, and margins using FactSet formulas or Excel add-ins.
5. Create charts and tables for the note, and save templates for re-use.
6. Export tables and charts to the research platform or PDF for distribution.
Example B — Portfolio manager performing performance attribution
1. Import portfolio holdings and trade history into FactSet’s portfolio analytics module.
2. Select benchmark and set attribution methodology (e.g., Brinson-Fachler).
3. Run attribution to isolate allocation, selection, and interaction effects.
4. Drill down into sectors or individual securities to identify drivers of excess return.
5. Generate client-ready reports and schedule periodic automated reports.
Example C — Quant researcher backtesting a factor strategy
1. Define universe and factor construction rules (e.g., momentum measured by 12-1 month returns).
2. Use FactSet bulk data or API to download historical prices, fundamentals, and corporate actions.
3. Clean and standardize data (adjust for survivorship bias, delistings).
4. Run backtests in the researcher’s environment (Python/R), incorporate transaction costs and turnover limits.
5. Analyze results, perform stress tests, and export performance summaries.
Implementation and integration — practical steps for onboarding FactSet
1. Requirements gathering
– Document data needs (coverage, frequency, history), analytics required, users, and systems to integrate.
2. Licensing and contract negotiation
– Identify modules required (terminal, data feeds, APIs, add-ins) and request a proof-of-concept/data trial.
3. Technical integration
– Work with FactSet’s onboarding team to set up accounts, API keys, SFTP feeds, and single sign-on (SSO).
– Map FactSet fields to internal schemas and test sample extracts.
4. Data validation and reconciliation
– Run parallel checks comparing FactSet outputs with existing systems for a sample period; reconcile material differences.
5. Workflow configuration
– Customize dashboards, templates, and reports; set up user permissions and audit trails.
6. Training and adoption
– Schedule role-based training sessions; create internal cheat-sheets and templates for common tasks.
7. Ongoing governance and support
– Establish a point of contact with FactSet support, schedule periodic reviews, and include data vendor checks in vendor management.
Evaluating FactSet vs. competitors — a practical checklist
– Data coverage and depth: Does the vendor cover regions, asset classes, private company data, and historical depth you need?
– Data freshness and latency: For trading desks, sub-second or intraday updates may be required.
– Integration: Are APIs, bulk feeds, and Excel add-ins available and compatible with your tech stack?
– Pricing and licensing flexibility: Does the vendor offer modules and enterprise options suited to your scale?
– Analytics and workflow fit: Are the ready-made tools (attribution, screening, modeling) aligned with your processes?
– Support and client service: Onboarding resources, SLAs, and local support availability.
– Governance and compliance features: Audit trails, user-level access controls, and regulatory reporting support.
– Total cost of ownership: Consider initial setup, recurring fees, and internal integration costs.
Suggested action: run a two- to four-week proof-of-concept that exercises real workflows and integration paths to compare vendors.
Data quality, governance, and compliance
– Multiple-source aggregation: FactSet aggregates from many suppliers, which can improve coverage and pricing competition, but requires normalization.
– Auditability: Use FactSet’s change logs and metadata to track data provenance for regulatory audits.
– Vendor risk: Maintain vendor management processes (contract terms, business continuity plans, data protection).
– Regulatory reporting: Verify that the data and analytics support your firm’s regulatory reporting and recordkeeping needs.
Security and privacy considerations
– Authentication and access control: Implement SSO, least-privilege access, and multi-factor authentication where supported.
– Data encryption: Confirm in-transit and at-rest encryption for feeds and hosted solutions.
– Local regulations: Ensure data residency and privacy requirements are met in relevant jurisdictions (especially for private or client-sensitive data).
– Compliance reviews: Include cybersecurity and privacy teams early during procurement and onboarding.
Cost and licensing: practical guidance
– Subscription model: FactSet typically licenses modules and seats; costs depend on product mix and user counts.
– Negotiate pilot periods: Ask for short-term trials or sandbox access to validate fit.
– Bundle vs. à la carte: Determine whether an enterprise bundle yields better economics than individual product add-ons.
– Budget for integration and validation: Include internal engineering and data governance resource costs.
Pros and cons (summary)
Pros
– Broad, integrated dataset across markets and asset classes.
– Strong analytical tools and Excel integration for finance professionals.
– Customizable and supported onboarding for large institutions.
– High client retention historically (source cites ~95% retention).
Cons
– Can be expensive for smaller firms or limited-seat use cases.
– Complexity: requires validation and configuration to match internal practices.
– Overlap with other vendors may create redundancy; careful vendor consolidation is needed.
Practical example: Building a comparable-company table (M&A / valuation)
Step 1: Define peer universe (sector / SIC / NAICS filters).
Step 2: Use FactSet screening to pull companies that match revenue and market cap criteria.
Step 3: Pull the latest fiscal year financials, share counts, net debt, and market cap.
Step 4: Calculate EV and multiples (EV/Revenue, EV/EBITDA, P/E).
Step 5: Sort and summarize median and quartiles; flag outliers.
Step 6: Export the table to Excel or PowerPoint for the pitchbook.
How to decide whether FactSet is right for your firm — action plan
1. Map critical workflows and data needs.
2. Prioritize “must-have” features (coverage, latency, analytics).
3. Run a proof-of-concept with real users and datasets.
4. Perform cost-benefit analysis including integration and governance costs.
5. Check references and industry comparisons (Bloomberg, S&P Global, Morningstar).
6. If moving forward, define a phased rollout with KPIs for adoption and ROI.
Concluding summary
FactSet is a mature financial data and analytics provider serving investment managers, banks, and research organizations. It offers a broad suite of products — from desktop and cloud analytics to bulk data feeds and APIs — designed to support valuation, portfolio analytics, quantitative research, and financial reporting. Firms evaluating FactSet should define core requirements, run practical proofs of concept, validate data and integration paths, and consider total cost and governance impacts. For many large financial institutions, FactSet’s comprehensive datasets, customizable tools, and enterprise support make it a compelling option; smaller firms should weigh module-level costs against required functionality and competitor offerings.
Sources and further reading
– Investopedia. “FactSet.” https://www.investopedia.com/terms/f/factset.asp
– FactSet. Corporate site and product pages: https://www.factset.com
– FactSet. “Contact FactSet,” “FactSet Partners,” “Open: FactSet Marketplace,” “FactSet Locations,” “Why Choose FactSet?,” “Our Leadership,” Investor Relations pages, and 2021 Sustainability Report.
– Crunchbase. “FactSet: Summary.”
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