He presented them with a scenario. There's a new strategic opportunity that will have a high return. Any skilled analyst would recognize that it adds shareholder value to plow money into this opportunity. How would you communicate this to the marketplace?

Fifteen years ago, the investment chiefs said, they would have been grilled by a research analyst, forced to explain the intended benefit and, if their message resonated, they could expect "buy" recommendations and a higher stock price.

Today?

"They would just say we missed the quarter and we would get 'sell' ratings."

The problem, in part, lies with the financial freefall that defined 2008 and led to the wholesale withdrawal of money from active fund managers. Many funds disappeared and, in turn, many research analysts were laid off.

DeTore says the shift has left the capital-allocation system in disarray.

"What if we are not being very good at identifying bad ideas and the capital isn't following the good ideas?'' he says. "When our market system functions well, it's through people buying and selling shares, taking capital from the weaker companies and giving it to the innovative ones."

DeTore says there's no shortage of young, bright and eager students hoping for a career in investment research. Firms just need to once again recognize the value.

"Those investment firms that have maintained their dedication to excellent fundamental research will have a real edge in today's markets," he says.

-- Reported by Joe Mont in Boston.

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