Commentary

Marianne Brown
Traders Magazine Online News

The Surprising Factor Financial Firms Need to Invest in To Accelerate Growth

When it comes to people, a firm's success relies on more than just the top contributors to the bottom line, according to FIS. In its latest report, shared with Traders Magazine, the firm says it actually found firms that are prioritizing investments in digital expertise are growing nearly twice as fast as their peers.

Traders Poll

In your opinion, what is the biggest hurdle facing the blockchain?

Cost of implementation

17%

Too many systems available

23%

Not applicable to my business

3%

Uncomfortable with the technology

33%

Nobody else is using it

23%

Free Site Registration

November 11, 2009

Cover Sidebar: The CCA Threat

By James Ramage

The growth of electronic trading and client-commission arrangements poses a strategic challenge to mid-tier and regional firms, according to John Feng, a consultant with Greenwich Associates. As more commissions are paid through these channels, mid-tier and regional firms must come up with a strategy to avoid losing trading flow and dealing with more CCA checks.

Many CCA trades are done electronically: The execution firm keeps the portion of commission associated with the trade, while passing on the portion associated with the research in the form of a CCA check.

The availability of the electronic channel has given bulge bracket firms an opportunity to venture more aggressively into the CCA space.

Historically, some bulge bracket firms were wary of the soft-dollar--or CCA--business because they thought it could cannibalize their own full-service businesses, Feng said. But electronic trading gives them a solution. Bulge firms can execute CCA trades electronically, and therefore pick up volume and cut a check to a third party for research. All the while, Feng said, the bulge firms don't necessarily eat into their own full-service business while picking up this incremental volume.

 

(c) 2009 Traders Magazine and SourceMedia, Inc. All Rights Reserved.

http://www.tradersmagazine.com http://www.sourcemedia.com/