Trend To End Free Bank Research Progresses TABB Study NotesMark Melin
Is the end of "free" institutional bank research upon us?
TABB Group released its 12th annual Institutional Equity Trading report and highlighted a major trend regarding the cost of institutional research and commissions patterns, one also noted in ValueWalk last September. That trend is gaining trend strength. The report pointed to buy-side firms where nearly one-quarter of the broker list receives three-quarters of the commissions, and higher commission costs is in part due to research. This highlights a trend change. In 2016, one-third of asset managers and nearly one-quarter of hedge funds expect to decrease their broker lists, and research could be a factor. Bank and independent brokerage research, which has been traditionally baked into the commission cost, is increasingly being separated and could lead to a change in how such research is consumed and structured.
Brokerage and bank research costs are typically baked into the commission
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