By requiring investors to set research budgets based on specific monetary values for the sell-side products and services they consume, the new rules could prompt asset managers to cut back on the number of brokers they use in order to limit a significant new administrative burden. Consequently, independent providers and global bulge-bracket brokers alike could find themselves in the crosshairs. The end result could be a reduction in the amount and quality of research and advisory services available to investors, especially to smaller institutions that could find their investment teams at a severe disadvantage.
Methodology
In May 2015 Greenwich Associates interviewed 118 buy-side U.S. equity broker liaisons, heads of commission management, and head traders.
Respondents answered a series of qualitative and quantitative questions about the structure of their broker vote process, valuing broker research, and expected influences from the changing regulatory landscape coming out of Europe.
All respondent institutions in Greenwich Associates’ Equity Investors research are placed into one of seven tiers, based on their aggregate cash equity commissions generated. Greenwich Associates Priorities are the largest commission generators, comprised of Tiers 1-4.
The data reported in this document reflect solely the views reported to Greenwich Associates by the research participants. Interviewees may be asked about their use of and demand for financial products and services and about investment practices in relevant financial markets. Greenwich Associates compiles the data received, conducts statistical analysis and reviews for presentation purposes in order to produce the final results. Unless otherwise indicated, any opinions or market observations made are strictly our own.
© 2015 Greenwich Associates, LLC. Javelin Strategy & Research is a division of Greenwich Associates. All rights reserved. No portion of these materials may be copied, reproduced, distributed or transmitted, electronically or otherwise, to external parties or publicly without the permission of Greenwich Associates, LLC. Greenwich Associates®, Competitive Challenges®, Greenwich Quality Index®, Greenwich ACCESS™, Greenwich AIM™ and Greenwich Reports® are registered marks of Greenwich Associates, LLC. Greenwich Associates may also have rights in certain other marks used in these materials.