The repeated failure by broker-dealers to recognize the significance of post-trade service to their asset management and hedge fund clients has lead to severed relationships and suspended trading, an independent consultanting firm reported.
A survey of 50 top buy-side institutions in Europe found that 80 percent of European hedge funds and 40 percent of asset managers have suspended trading with broker-dealers in the last year because of poor post-trade service.
The New York-based consultant team, m.a. partners, reported that post-trade service suffered dramatically, as broker-dealers shifted more of resources toward the front office. The report found that neglecting the post-trade service has cost broker-dealers €150 to 200 mn each year in commission.