Nearly half of U.S. portfolio managers say they should direct more business to brokers with little or no conflict of interests between their research and investment-banking arms, revealing Wall Street conflicts are more than a retail concern, according to a new survey by Greenwich Associates. Plus, 84% of managers say they want equity analysts to disclose whether they own stocks they are rating, although 55% of the managers do not think the analysts should be barred from owning stocks they rate.
In addition, 53% of portfolio managers said the SEC’s Regulation FD has increased market volatility, while only 20% say there has been no effect. Also, 40% say the new rule has decreased the value of broker research, while 28% said research has not been affected. Only 29% of managers said Regulation FD has made company research less available, while 44% disagreed.
Managers also plan to continue cutting costs in the face of shrinking portfolios. Average commissions are expected to fall to 4.8 cents a share this year, from 5.1 cents in 2001 and 5.3 cents in 2000. Also, use of soft-dollar and commission-recapture programs are increasing, while less expensive program trading jumped to 45% from 30% over the past two years.
