In an era of lightning-fast electronic trading, great customer service from a human has become the ultimate secret weapon for equity brokers.

Every year, Crisil Coalition Greenwich asks buy-side equity traders across North America to list the most important factors driving their choices when picking brokers for “high-touch” trades. This year, more than two-thirds cited customer service and broker desk coverage, making those factors far and away the top criteria.

“Even as electronic execution becomes the norm, the human touch has emerged as the ultimate differentiator,” says Jesse Forster, Senior Analyst at Crisil Coalition Greenwich Market Structure & Technology, and author of U.S. equity broker selection: It’s the service, stupid. “It’s no longer just about speed and efficiency – it’s about having a trusted counterparty offering tailored support, access to natural liquidity and a steady supply of market intelligence throughout the trading day.” 

A Human Touch in Electronic Trading
Of course, electronic execution, which accounts for a growing share of all equity trading volume, counts in terms of both broker capabilities and trade outcomes. When selecting brokers for “low-touch” trades, buy-side traders turn first to execution quality and trade performance, which are cited as key selection factors by 46% of study participants, followed by the increasingly important function of algo customization.

“However, even in low-touch trading, traders favor brokers who excel at providing execution consulting, and strategy advice, both of which are generally delivered by human sales traders,” says Jesse Forster.

Overall, traders seek brokers who can deliver exceptional service, high-performance trade execution, and expert guidance and support. This includes both the ability and willingness to help them navigate complexity, optimize their trading strategies, and achieve their investment objectives. In many cases, those traits are not so easy to find.

U.S. equity broker selection: It’s the service, stupid analyzes how buy-side organizations choose brokers for equity trades and identifies the top criteria driving broker selection for both high-touch and low-touch trades. The report also highlights the major challenges facing buy-side equity traders across the trade execution cycle and in their everyday work.

Source: Crisil Coalition Greenwich