The big interview: ITG’s Frank Troise

Half a year into the job, John Bakie catches up with ITG’s new CEO, Frank Troise, to ask how he’s preparing the business for the future.

Six months is a long time in finance, and for Frank Troise that period has seen him hit the road and visit over 150 clients since he took over the helm of agency broker ITG in January.

“We’re getting out there to recover and gain back the trust of our clients, we’re talking about governance issues and looking at how we can best assist them,” Troise said.

A big part of his early months in the job have been helping bury the skeletons in ITG’s closet. Last year the firm reached a $20 million settlement with the US Securities and Exchange Commission (SEC) due to a secret desk within the company that was misusing information from its dark pool.

The scandal saw the company’s longstanding former CEO, Bob Gasser, step down in August 2015 and the board began the hunt for a new leader. Troise had previously worked for eight years at ITG until 2005, when he left to take up various roles at Lehman Brothers and Barclays, before serving as head of execution services at JP Morgan.

So, in the wake of the Scandal, Troise has prioritised the rebuilding of trust with clients.

“On my first day in the job we had a board meeting and appointed our new chairman, Minder Cheng, who is a well-respected former buy-sider,” said Troise.

Since then, ITG has made several key board appointments, including former SEC general counsel Brian Cartwright, ex-Nasdaq CEO Lee Shavel and former hedge fund partner Kevin Lynch. All these appointments are intended to solidify the firm’s commitment to greater corporate governance.

But it’s not just about addressing issues from the past, Troise is also thinking about the future, and part of that has been through ensuring ITG is a leaner and more efficient business as the brokerage business moves into intensely competitive times.

“We’ve taken action to make sure we focus on our core capabilities,” he explained, “we recently sold our research business and are now completely out of that market and we’ve shut down some other peripheral businesses we own so we can focus on our core competencies of execution, analytics and workflow tools.”

Refocusing on its core business and disposing of peripheral operations means ITG has been able to reduce its headcount by around 100 people without making any redundancies.

Looking to the future, Troise sees a number of trends developing around the world that could become positives for ITG, in particular the increasing focus on best execution and unbundling.

He said the focus among asset managers on improved measurement of trade performance and separation of research and execution commission dollars is something that ITG can take advantage of globally. While regulatory pressure has driven this forward in Europe, Troise notes that other parts of the world are following that lead as their clients in turn seek more transparency over the way their money is spent and invested.

Troise is also confident that ITG can weather the storm of uncertainty currently hitting markets and the financial sector in the wake of the UK’s decision to leave the European Union last month.

ITG Europe is incorporated in Ireland and has offices in many European markets including London, and Troise said ITG is flexible enough to cope with a range of scenarios.

“There are of course a lot of unknowns that will have to be worked out between the UK and the EU but we think it’s likely the UK will negotiate some streamlined access to the single market,” he said.

Other priorities in the months ahead will also include continued growth in ITG’s Asian business, which Troise notes was “tiny” when he left the firm back in 2005, but now accounts for a significant and growing part of its global business.