Brokers step up in COVID-19 crisis as traders rate execution coverage

Jefferies, Morgan Stanley, Goldman Sachs, JP Morgan, Citi and Bank of America were considered ‘standout dealers’ by US buy-side traders.

Buy-side traders in the US have named the brokers they were most satisfied with as the global coronavirus pandemic gripped equity markets in March.

A survey of US buy-side traders conducted by Greenwich Associates several weeks later in April found that despite the widespread shift to remote working, a significant 80% of respondents were satisfied with brokers’ performance.

Of those buy-side traders, 50% said they were ‘highly satisfied’ with brokers’ performance, despite issue being raised about settlement processes, according to Greenwich. The traders were asked to consider equity brokers’ performance in providing liquidity, hedging solutions and market insights at the height of the volatility.

Jefferies, Morgan Stanley, Goldman Sachs, JP Morgan, Citi and Bank of America Securities were listed as the ‘standout dealers’, considered most helpful in navigating the market turmoil caused by coronavirus. Outside of the larger institutions, Greenwich said that Instinet, JonesTrading, RBC Capital Markets and Virtu Financial, also stood out for execution support among clients.

More than 50 brokers were named as being particularly helpful during the period, which John Feng, author of the research and managing director for markets at Greenwich Associates, said highlights the need for the sell-side to continue investing in technology amid increased competition.  

“The sheer number reflects the fiercely competitive nature of the equities business and is a reminder that gains can be transient and firms that have performed well in the short term will need to continually invest and adapt to maintain their edge,” said Feng. “One outcome is not in doubt: The crisis has underscored the need for all firms large and small to continue to invest in technology, both in execution and in workflow.”

Earlier this month, Greenwich revealed via a separate study that buy-side traders in Europe ranked JP Morgan as the ‘standout dealer’ for fixed income in the region during the coronavirus pandemic market volatility. JP Morgan topped the overall league for European fixed income across G10 rates and G10 credit, while Goldman Sachs and Citi ranked second and third respectively.