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© The Z/Yen Group of Companies 2008
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7 February 2005
Investment Managers increasingly measure Brokers’ Operational Performance to
support the “Broker Vote”
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“Investment Managers are increasingly
performing sophisticated ranking of their Brokers’ Operational
Performance as part of their business allocation process. Brokers who
excel at confirmations and settlement processing and who develop
relationships with the Investment Managers are winning business,
particularly for large-scale program trades.” |
In their recent annual Europe-wide survey of
Operational Performance, Z/Yen Limited interviewed 71 leading investment
managers in 10 European countries to assess the importance of Operational
Performance in Broker selection and to rank the services provided by 13 leading
Brokers for both Equities and Fixed Income products.
As in 2004, Merrill Lynch and CSFB were ranked highly both for their core
processing services and for client relationship management support.
Geoff Mizen, Director of European Client Services at Merrill Lynch,
commented: “We take the delivery of Service Excellence to our Clients seriously. Through our Client partnerships, we continuously strive to improve and build
mutually beneficial relationships at the operational level. We are pleased to
note in the survey that overall scores for brokers are up year on year, an
indicator that service standards are improving across the industry. We believe
the survey, in conjunction with individual Client scorecards and regular face to
face feedback, has helped bring about this focus, and is therefore delivering
the results we anticipated when agreeing to participate in 2003. We would like
to thank all our Clients who provide us with regular feedback, through the
survey and bilaterally, that helps us to improve our performance”.
Roger Bartlett, Vice President for European Client Services at CSFB,
said: "We are very pleased to be recognised by our clients for the quality of
our operations. Z/Yen's independent survey continues to help the investment
management community measure broker performance and raise standards for all
participants. The results demonstrate CSFB's excellent performance in both
equity and fixed income and as such we are delighted to be recognised among our
investment banking peers."
The survey found that Operational Performance continues to be a growing factor
in the “Broker Vote” (the process by which Investment Managers allocate business
to Brokers):
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Operations participate in the “Broker Vote”
at 34% of Investment Managers (up from 20% in 2003). At these Investment
Managers, Operational Performance contributes an average of 15% to the
“Broker Vote”;
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40% of Investment Managers said that
“Excellence in Operational Performance can impact business flow” for both
Equities and Fixed Income securities (48% for Program Trading);
-
50% of Investment Managers had reduced
business with a Broker because of poor Operational Performance. 23% had
“struck-off” a broker in the last 12 months;
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More than 50% of Investment Managers are now
ranking their brokers for Confirmation and/or Settlement Performance.
Jeremy Smith, Director of Financial Services
at Z/Yen, said, “This survey is now in its third year and we have seen
increasing sophistication in the way that Investment Managers manage their
Brokers. In response to this, the Brokers have made and are continuing to make
huge efforts to improve and tailor their services to Clients requirements and,
this year, we have seen improvements in 26 out of 28 of the categories on which
we report.“
Z/Yen surveyed 71 leading Investment Management companies in 10 European
countries during October and November 2004. The survey was commissioned by 13
leading brokers, to gain an independent view of how their services are perceived
and to help prioritise their clients’ customer service needs. The survey covered
28 benchmark categories including confirmation timeliness and accuracy,
settlement and interest claim performance, customer service and relationship
management across both Equities and Fixed Income securities.
A summary of results of this study (Operational Performance of Brokers –
European Securities 2004) is available at:
http://www.zyen.com/Services/finance.htm.
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For further information, please contact Jeremy Smith, tel: (020)
7562-9562, e-mail:
jeremy_smith@zyen.com. Z/Yen specialises in risk/reward management, an innovative approach to
improving organisational performance. Z/Yen’s clients include blue chip
companies in banking, technology and professional services as well as
charities and care organisations (see
www.zyen.com).
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