Brokers offering the buy-side multi-asset services and capabilities will thrive as they allow for a simpler route when executing orders, according to a panel at TradeTech.
The buy-side panellists agreed sell-side firms and technology vendors offering a ‘one-stop shop’ for services are more appealing to trading desks.
“I buy the idea that buy-side execution will fall to simplicity. It’s about going to single shop brokers as single product providers of execution,” said Fabien Oreve, global head of trading at Candriam Investors Group.
He referred to Liquidnet as an example, with the industry often viewing the firm as equity block trading service specialists.
Oreve explained he initially spoke with Liquidnet about fixed income and as Candriam operates a centralised, multi-asset dealing desk, it makes more sense to connect to Liquidnet for equities too.
“Liquidnet are considered a one-stop shop, that’s the route they are taking and that’s what makes them interesting,” he told delegates.
Eric Boes, global head of trading at Allianz Global Investors, added regulators have created something very difficult for multi-asset buy-side desks to navigate, but sell-side technology is key to navigating those changes.
“We’re in this together with the sell-side and on average they are doing a very good job. It’s a very creative industry which is constantly coming up with new technologies and execution protocol,” he said.
Boes added regulators often accelerate technology and require buy-side firms to use it, despite that sometimes presenting challenges.
“The buy-side are empowered by technology, but it’s tricky because you can’t say no to regulators who require you to use it. The moment the technology is out there to potentially help you, it’s difficult to justify why you chose not to use it.”