Analysts at investment banks are giving less time to mutual fund portfolio managers who call them looking for stock insight and more time to hedge funds, Bloomberg reports. The reason is because hedge funds are more lucrative clients, given their needs for prime brokerage, securities loans and complex trades, and managers at investment banks are instructing their analysts to cater to these preferred clients.

According to Greenwich Associates, the average hedge fund pays $33 million a year in commissions, while the average mutual fund pays $16 million, or less than half, of that.

Steven Roukis, for instance, director of research for Matrix Asset Advisors, used to spend half an hour on the phone with analysts five years ago. Today, he said, he’s lucky if he even gets five minutes.

“You have to call at off-peak hours, like early in the morning,” Roukis said. Michael Gambardella, a well-regarded steel analyst with JPMorgan, confirms that he used to give his time freely to asset managers, even those who weren’t clients, and today screens his calls and spends more than half the day speaking to hedge funds.

Ross Miller, a finance professor at the State University of New York at Albany, worries that less research could affect the performance of mutual funds, particularly small fund shops. “Smaller mutual fund managers, who are strongly dependent on sell-side research, will get burned,” Miller said. “They’ll either get gobbled up, go out of business or become hedge funds.”

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