By Kevin McPartland, Head of Market Structure & Technology Research, Greenwich Associates

1. How the Relationship Between Buy-side
and Sell-side has Evolved
October 2016

2. Greenwich Associates
Drivers of change are numerous
2
• Economics: Monetary policy around the world is like nothing
we’ve seen in our lifetimes. The US is (sort of) growing while
the rest of the world can’t shake the credit crisis.
• Regulation: Dodd-Frank was the largest overhaul of financial
markets in decades; Basel III’s impacts are staring to hit home;
MiFID II and EMiR combined make Dodd-Frank look like child’s
play.
• Politics: Brexit and the US presidential election have created
enough political uncertainty to keep us all busy for a while.
• Technology: Innovation both within Wall Street and outside is
disrupting business as it did in the late 1990’s – but with actual
profits this time.
Which of these is driving the most change? Which are cyclical
and which are structural? There is no single answer except
change is inevitable.

3. Greenwich Associates
Tell me something I don’t know
3
• Research and information are
more widely available via digital
channels, making it harder to tell
clients something new.
• Self directed trading by investors
continues to grow across asset
classes, particularly in fixed
income.
• Trading remains concentrated
with an investors top few
counterparties.
• Fewer dealers are able to
provide balance sheet as they
once did

4. Greenwich Associates
Trading desks are smaller but more efficient
4
• The doing more with less is the reality
• Execution quality and client service are still differentiators, but the skills
needed on the desk to provide and promote those differences has changed.
• Desks keeping the best and brightest, with a constant focus on “upgrading”
• Relationships are still key, but the value of entertainment is trumped by
actual service quality
• And last but not least – leveraging technology is a must

5. Greenwich Associates
E-trading isn’t the only place innovation is needed
5
• Leveraging technology can make
the “upgraded” sales desk even
better despite fewer bodies.
• Using data to enhance client
relationships is key, but doing so
well requires properly:
• Collecting every relevant data
point
• Analyzing collected data to
produce usable outputs
• Putting those outputs into use
both internally and with clients.
• Few of our study participants
believed they hit all three points, but
all had plans to up their efforts.

6. Kevin McPartland
+1 203.625.4302
Kevin.McPartland@greenwich.com
@kmcpartland