Expert Network

An expert network is a group of professionals who are leading experts in their field. These experts are available for hire by third-parties who need consultations on specific topics that fall outside of their general knowledge base.  

Expert networks are groups of Subject Matter Experts (SMEs) who are hired by firms in need of high-level expertise that their in-house employees are unable, or unqualified, to provide. Experts in these networks generally charge large fees in exchange for their services, and they can be hired through long or short-term contracts, on an as-needed basis or be held on retainer.

Some expert networks retain their SMEs as employees and match them directly to firms in need of expert options on an ongoing basis. These networks often range in size depending on the topic, with more specialized groups existing in smaller numbers.  

While many investment companies utilize expert networks to garner more in-depth information surrounding potential investment opportunities, they can be used by anyone looking for someone with unique or specialized information. For example, a network news show may reach out to an expert network in search of a doctor who can consult on a new study or report that has been published so that they can understand how to correctly report the findings. If none of the reporters or staff writers possess a medical degree, a doctor could be hired as a SME to explain the study and help the producer craft the news segment around it.

Expert Networks most often are used in investing. They fell out of favor in the early 2000’s when some experts within the networks provided inside information to investors, who then made transactions based on these tips. Since then, regulations have tightened around what specific types of information experts are permitted give to the firms that hire them, and the permissible uses of the information received.

Consider as an example a broker who is looking at the available stocks of a pharmaceutical company that has just received approval from the Food and Drug Administration (FDA) to begin selling a new heart medication. Since the broker does not have a background in pharmaceuticals she hires a SME from the expert network to help her understand the potential market impacts of the heart medication and what it might possibly mean for the company’s profits.

The SME typically offers an inside view of the medication, explaining how it works differently from other medications, and helps make predictions regarding demand for the new offering. This allows the broker a better understanding of the potential value of the stock that underlies the company offering the new product.