Buy Side Sees Room For Sell-Side Improvement

A recent survey indicates that the buy side wants better collaboration from its sell-side counter parties.

The sell side can make better use of technology to deliver improved and more comprehensive service to its buy-side clients, according to a study commissioned by Syntegra and carried out by Mori (Market and Opinion Research International).

The study, which involved questioning 101 investment, corporate and intermediary organizations in the United States and United Kingdom, found buy-side frustration with some sell-side counter parties that often don't have the right information available at the right time. For example, one of the main grievances with the sell side is that firms do not have information, such as trading history, P&L, and limits when interacting with their buy-side clients.

The buy side says the sell side should also be looking into more mobile technologies so that representatives can have the appropriate information ready whenever and wherever a buy-side professional requests it.

"The sell side has all that information but it is in silos," says Allan Hyde, research director, Mori. "Much of that information has not been joined up so (the sell side) needs to put in the plumbing between those systems."

The survey also found that 37 percent of the respondents believe the ability to voice conference in sector experts or analysts would improve, either a great deal or a fair amount, the service delivered by sell-side firms, while 36 percent say the ability to access client information more readily would be a welcomed improvement.

The study notes, " ... by having client information available to team members more often (better than the current average of six times in 10) a sell-side company is likely to create a competitive advantage."

Despite the advent of new technologies and the rise of the Internet as a means of communication, most buy-side firms still say they rely on phone communication with their sell-side counter parties as the main method of interaction.

That's a shock to many in the industry who see straight-through processing and, possibly, T+1 as a long-term goal. They note that manual communication must end if the industry is ever to shorten the current three-day settlement cycle.

"A big thing is communication," says Hyde, "replacing the fax and the phone with more interactive and flexible technologies."

Ultimately, the message to the sell side is that it needs to embrace diverse methods of technology for communication and make them work together in a cohesive fashion. Only by combining voice, Web, e-mail, video, mobile and instant-messaging technologies can sell-side firms deliver the service buy-side institutions want.

"I would say that the sell side should use whatever technology it can to demonstrate that it knows as much about its clients as possible so that, when they call, you can give them seamless service and convince them that you are on the ball," says Hyde.