Sales & Trading
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Though competitive pressure and market realities play a role in the service models that firms adopt and employ, trading customers still prefer high touch — for now. Our research on U. Phil, what insight do you have from our trading customers on what they are looking for from their top relationships?
Buy-side traders are still looking for access to liquidity. This fragmented, highly regulated marketplace causes traders fits when looking for a block. Dark pools are not the only answer and having a skilled sales trader help you find liquidity is invaluable. We also are seeing prime brokerage sales and trading continuing trend toward a more well-rounded, cross-asset sales trader.
The buy-side is looking for alpha across all asset classes, and the sell-side needs to be able to prime brokerage sales and trading with this shift. Your most recent research also shows buy-side traders expect to consolidate their broker lists. We note ever more aggressive competition for trading commissions among the largest prime brokerage sales and trading. What characteristics will winning brokers have in this landscape? As I mentioned earlier, having access to liquidity and the ability to effectively trade cross asset will be some of the top characteristics of brokers that will prevail in this shifting landscape.
Access to the deal calendar, best performing algos, prime brokerage services and the ability to access non-research-related resources i. First, research remains critical. Even in an unbundling world, prime brokerage sales and trading in the U.
As brokers are deciding which clients to prioritize, the buy-side is doing similar calculus on their brokers. Second, partnership is key. Never before has there been such significant turnover on the sell-side, and clients are feeling the pain. Taken together, it is clear that brokers providing consistent, high-quality service will stand to win. Firms prime brokerage sales and trading already shifting their business models in preparation for MiFID II, and the equities business itself has undergone significant shifts that are likely to continue.
What do you think will be the headline trend for trading in the year ahead? Should be a very interesting year! I think unbundling will certainly have an impact on trading relationships.
As execution starts to stand on its own, we will see a shortening of broker lists and increased adoption of Transaction Cost Analysis tools.
There will also be changes brought about by new dark pool rules that will impact where certain securities are routed and how those trades get executed. Equities Exchange Magazine Investment banking Relationship management.