Spent a great few days in Madrid last week at the International Trader Forum. The event brings together key figures from the buy and sell-side to debate the current and future likely shape of the industry. One of the key predictions this time was the rise of a new type of sales trader. One that could do all the relationship stuff of before, but was also armed with new tools that enable them to source liquidity in size and provide real colour on any given trading situation. One of the reasons for this is the buy-side’s frustration with continued IOI spam and the fact that even the best algos struggle to sniff out large blocks, let alone trade them. In short, markets are getting more complicated almost every day and so the value of human interaction and insight is coming at a premium again.
The trick, however, is to give the sales trader the ability to bring together (and make sense of) multiple information sources. But, this needs to be done in such a way that it is part of the user’s daily order management workflow. The costs of being in this industry are rising at the same time as the revenue pool is going to shrink. Whilst this might be all down to the folks in Brussels and their political masters, ignoring the problem or hoping it will go away is not the answer. ‘Super sales traders’ armed with the right kit is how sell-sides will maintain their relevance and generate real productivity from their human capital.