Slide 1

The Pamphleteers

7 February 2005

Investment Managers increasingly measure Brokers’ Operational Performance to support the “Broker Vote”

“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):

  • 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”;

  • 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;

  • 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 here.



For further information, please contact Jeremy Smith, tel: (020) 7562-9562, e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it..  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).