Firm58 now offers commission-sharing arrangement management services free to small and midsize brokers who have 10 or fewer clients in their existing CSA or soft dollar programs.
Firm58 is a technology vendor based in Chicago that markets stand-alone CSA management platforms to brokers with many CSA accounts. The new service, called Fast Start, allows brokers to access the software in the “cloud,” rather than installed on their premises.
Commission-sharing arrangements are used by money managers to obtain research from one broker or research house and trade with another.
The idea was to offer small and midsize brokers an affordable way to help the buyside trade with whichever execution partner they choose when paying for research, said Firm58 co-founder Sam Mele. With the basic automated Fast Start service, brokers can focus more on executing orders than on the data-intensive paperwork associated with divvying up commissions and paying research firms.
“The original subscription fee is free, and then we’ll charge a modest fee once clients get more business,” Mele said. “Some brokers are just starting to bring their soft dollar programs online, so our product helps them get started at a minimal cost.”
Once a broker exceeds the 10-client threshold, Firm58 has a tiered pricing structure it charges for use of the CSA program.
Mele said more than 10 brokers are already using the CSA system and that Firm58 would like to add several new broker users per quarter.
“If we can add a few new firms every quarter, I’d call that successful,” Mele said. “And we’re on target to do that.”
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