WallachBeth Capital, a provider of institutional execution services, has continued to strengthen one of the industry’s most respected ETF desks by focusing on its core strength – cultivating strong client relationships.
Andy McOrmond, Managing Director and one of the group’s founding partners, recalls that the group originally differentiated themselves when they launched in 2008 by bringing their competitive block trading process to buy-side clients. Their agency model stood out among the competition, providing clients “real dollar savings by collapsing spreads and passing that price improvement back to clients”.
According to McOrmond, their service offering evolved beyond just block ETF trading over the years, to leverage all types of ETF execution on behalf of the client, like basket trading, tapping into electronic liquidity, RFQs, and facilitating creations and redemptions.
McOrmond stressed that “when clients work with us on a trade, we are assisting them in all decision making aspects. Best execution involves pre-trade planning, excellent trade implementation as well as a post-trade analysis. It’s not just the trade we review, but also what we do in the future to improve. That’s where we add tremendous value.”
“Anonymity and access are two reasons our trading process continues to resonate,” noted McOrmond.
“One of our biggest advantages is that our clients remain anonymous, which helps minimize information leakage and performance slippage by making sure market participants do not trade alongside or in-front of client trades or model rotations,” he added.
And as competition continues to grow in the execution space, clients need a venue where they can easily access all the relevant market makers, which WallachBeth provides, all while keeping the client anonymous. “There is a lot of competition in the space, and who is best trading certain products and who is best for certain type of trades is constantly changing. This is something that is important to remember and stay on top of, especially if you have a relationship with just one or two market makers. It is something we are constantly evaluating and analyzing,” McOrmond commented.
As institutions continue to adopt and use ETFs, WallachBeth has seen significant growth within that specific client segment. “The more they understand ETFs, the better equipped they will be to understand how ETFs trade, and the better their trading experience with us will be” said McOrmond. “Education is vital. What a product is, how it trades, and why it trades. Institutions are focused on execution quality. We love that they are. It is one reason we have been such a good fit for them,” he added.
And just like WallachBeth’s execution process has expanded and evolved over the years, the group’s relationships with its client have also grown beyond just execution. “The relationships we have are centered on best execution, but they go well beyond that. Product selection, issuer relationships, industry intelligence, distribution strategies, platform and technology resources. These are the things we help our clients with. We have become a go-to resource for our clients, a partner that can help them find and use the resources out there to help them grow. We are invested in the success of our clients,” McOrmond said.
After the unprecedented times we have collectively faced in the last eighteen months, what is on the horizon for WallachBeth? McOrmond stressed that the health and wellbeing of clients is most important. “We are looking forward to being in-person with clients once again, building those relationships face-to-face. Everyone has shown how resilient we can be during very difficult times. It will be really rewarding to be back in-person with each other soon. There are several business initiatives here at WallachBeth that we are excited to discuss with clients. We can’t wait to hear about the challenges and opportunities clients are seeing. We are ready to find new ways to collaborate and support each other’s growth professionally and personally,” he concluded.