Half of all U.S. fixed-income managers say operational capabilities play some role in deciding which broker to use, and nearly 60% say back-office criteria are becoming more critical in choosing a dealer, according to a new study by Greenwich Associates and the Asset Managers Forum.
"With pricing becoming more consistent, asset managers and other institutional investors are increasingly able to direct business to those dealers that provide value away from the sales desk," Frank Feenstra, Greenwich Associates consultant, said in the report. "In this environment, operational capabilities and other qualitative measures are taking on a much higher profile."
The most important back-office functions, according to fixed-income asset managers, are efficient trade confirmation and trade settlement management. Those were followed by overall effectiveness of client service, adequate mortgage processing support, commitment to technology, timeliness of data for new issues, knowledge of client accounts and commitment to building a strategic partnership with the investment management community. Goldman Sachs, Lehman Brothers and Morgan Stanley ranked most consistently among top-ranked dealers in those functions, according to the Greenwich report.