Equity brokers in Asia, such as Bank of America Merrill Lynch (BAML) and CLSA Group, dedicate more than two thirds of commission from trades to research and advisory services, says Greenwich Associates.
According to a recent report from the research firm, 65% of all equity trade commissions are allocated research, advisory services and corporate access, while 29% is assigned to sales trading and agency execution (brokering and clearing).
The study showed Hong-Kong based CSLA was voted the top broker for Asian equity research during the year, followed by BAML and Credit Suisse.
“Research and advisory services drive trading revenues in Asia more than they do in almost any other market,” says John Feng, Greenwich Associates consultant.
However the research also showed the allocation of commissions to fund broker’s agency execution services had increased by three percentile points from 2012.
“Leading brokers are typically characterized by their ability to combine distinctive research and advisory coverage with robust execution capabilities across the high-touch and low-touch spectrum,” adds Jay Bennett, Greenwich Associates consultant.
The study was based on interviews with 238 Asian equity fund managers and analysts, 110 traders, and 35 users of equity derivative products at institutions.
Equity Research Takes Precedence For Asian-Based Brokers
Equity brokers in Asia, such as Bank of America Merrill Lynch (BAML) and CLSA Group, dedicate more than two thirds of commission from trades to research and advisory services, says Greenwich Associates.