We've noted often that equity analysts have fared poorly when it comes to estimating the earnings of the top financial services firms. A whole mess of moving parts complicates their efforts, and the days of handholding from the companies are long gone. Even the most seasoned analysts have been vexed by events.

Bloomberg ranks Goldman Sachs and KBW as No. 1 and No. 2 regarding financial sector research, based on an analysis of recommendations made by more than 2,500 analysts at 77 firms from January 2008 to July 2010. Goldman's analysts won the top spot by making 30 accurate calls on the 79 financial stocks. KBW earned the second spot by making 27 accurate calls on 78 stocks. This is not necessarily a lot to brag about, except in relation to other industry analysts.

The buy-side has taken note. "It's unusual to see original thinking in these reports, even though that's what's most valuable to me," a managing director told Reuters. He also said he no longer reads reports on individual stocks. You have to wonder if a whole new approach is in order, or at least a new approach for communicating results to the client. That's easier said than done of course.

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