Commentary

Brijesh Malkan
Traders Magazine Online News

Solving the Last Mile Problem in Investment Research

One executive takes a forward look at how will the research value proposition change over the short to medium term, and what are the products and strategies managers will turn to?

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August 31, 2002

A New Research Model at Instinet

By Gregory Bresiger

Institutional investors will pay an explicit fee - an annual subscription - for research services, which will be based on order flow. That will depend on how many third-party research providers they use and the level of access to analysts.

This is the idea behind a new research model at Instinet. The giant ECN and brokerage is offering co-branded research in a number of sectors, Instinet officials said. They said that one of the principles of this new approach is to work with independent research firms instead of directly competing with them.

Instinet wants to offer a complimentary product to sellside research. However, Instinet's cooperate rather than compete approach is not exactly new.

Another firm, a Web-based seller of independent investment analysis called Jaywalk owned by the Bank of New York, is working with unaffiliated research firms. Jaywalk wants to work with independents whose distribution and marketing powers are sometimes weak.

Still, Instinet's new approach is significant because of its status as a giant in the ECN world.