For Immediate Release –TORONTO, ONTARIO, September 22nd , 2017
Brendan Wood International announced today it has released the 2017 Canadian Equities Research, Sales and Trading Performance Report. The 2017 report, comprising 500+ portfolio debriefings of institutional investors who trade Canadian Equities, was confidentially released yesterday to the senior management teams of subscriber firms doing Canadian Equity business in Canada, the USA and Europe.
In light of performance pressures and the regulatory environment, the Buyers Guide version of the Report, to be released to Asset Managers on September 25th, is in particularly high demand and wide use to independently validate broker dealer relationship selection and commission allocation decisions.
“Best practices and anticipative compliance with regulatory trends are contemporary issues for institutional investors. The Brendan Wood Report has been adapted to satisfy those needs. However, leading investors remain equally interested in making sure they are partnering with the best of the best on the sell side which our Report makes crystal clear. There is no better tool to manage a commission budget. TopGunSM asset managers want to deal with the best and be the best,” said Brendan Wood, CEO and Group Chairman, Brendan Wood Companies.
The market for Canadian Equities has matured, now equaling the size of the domestic commission pool. The European market contributes another ~25% to the global commission pool for stocks, which has passed $1.5B on its way to $2B, according to the Brendan Wood intelligence team.
Since its inception in 1980, broker dealer managements have relied on the results of the Brendan Wood Report to re-allocate resources, sharpen their strategies and manage individual/team performance for the year ahead. Big issues in the Report include the consolidation of the dominant market share held by bank teams, the resultant competitive challenge for independent firms, increasing regulation and rationalization of the institutional commission dollar and the relationship between research, sales, trading and new issue business.
The Brendan Wood Report focuses not only on Research, Sales and Trading commissions overall, but on specific market share earned by dealers for their work on individual stocks. This new layer of specificity maps the quality and depth of stock by stock coverage of Canadian names in each broker dealer’s service strategy. As a planning tool, the Report identifies optimal names for coverage by different broker dealer platforms based on client needs and the returns available through institutional investors’ commission/CSA’s. The Brendan Wood review on a corporate name-by-name basis connects research, sales and trading services with lead underwriting and syndicate positions awarded to broker dealers by corporations in their financings and, increasingly, their M&A mandates. Last year, syndicate fees rivaled underwriting leads, accounting for about half of the investment banking fees on Canadian deals. Syndicate positions now constitute a significant revenue stream to independent and foreign firms, including global bankers who contribute to the global distribution of new issues and secondary trading in Canadian stocks.
“Canadian corporations rely on an independent assessment of research, sales and trading professionals who cover their name. They want to know which professionals most influence decisions made by investors to own their stock. This underlines the increasing importance to corporations of selecting optimal diversified banking groups. It also explains the awkward and ultra-sensitive separation of investment banking from research, sales and trading services in this regulated industry. Research has been a significant concern to regulators, although largely mitigated, in practice, by the diversity of analysts covering the same stocks and the independent in-house research conducted by institutional money managers concerning their own portfolios. The industry is now somewhat over-regulated, which has led to some rituals that don’t accomplish much,” said Mr Wood.
In the current and emerging regulatory environment, Brendan Wood International’s equity performance intelligence is designed to meet the growing requirements of institutions to justify their commission budgets and produce independent corroboration/guidance as to the efficient use of commission dollars. “An optimal configuration of broker dealer relationships is critical to an asset manager. An independent performance evaluation of all dealer services in stocks makes it easier for institutions to validate their commission allocations and back up their choices of individual sell-side professionals who provide best in class coverage of the corporate names in their portfolios. If you work with the best you are the best,” said Mr. Wood.
“Our intelligence has often been confused as a popularity survey, even a gossip list. The real purpose, however, is to enable broker dealers to reset strategy, allocate resources and plan revenue by choosing the corporate names they cover and the individual professionals on their teams for reasons of optimizing revenue per professional. These underlying strategic values explain the widespread use by nearly all management teams in the business. Our institutional asset management clients are looking for the optimal quality research, trading and sales coverage on the names in their portfolios. Corporates want their selected banking group to be the most influential on their shareholder bases. Our firm’s work provides each of these deep intel services to our broker dealer, corporate and institutional clients in a competitive and regulated environment which demands clear independent and timely evidence of value adds. The demand for real time intel is very strong and we now offer that service,” said Mr Wood.
“A critical by-product of our investigative work is the quantification of institutional commission allocations for the services of individual analysts, sales professionals and traders. The quality of their work, investment judgement and client coverage are key determinants of their personal success in garnering commission allocation votes for their firms. The best of the best, namely TopGuns, are those who participate in the top box of revenue. TopGuns, although less than 10 percent of the population of professionals, account for half of broker dealer revenue. We make every effort to recognize individual TopGunSM achievements as well as the team leaders and coaches who similarly outperform. We do this to celebrate TopGunSM performance and best practices but, hopefully, not to the detriment of the extreme value of the strategic intel and management advice this work affords to our clients. Regulatory bodies are highly interested in independent intel and we hope our work will make a positive difference to 2018/19 policy,” added Mr. Wood.
About Brendan Wood International:
Formed in 1970, Brendan Wood International (BWI) is an independent private intelligence and performance advisor which rates the management performance and shareholder confidence of 1400+ prominent corporate names in the public markets worldwide, based on hard data from shareholders. BWI intelligence on investment banking and secondary markets is available to investors, investment banks and corporate clients alike. BWI also provides uniquely informed performance counselling concerning strategy, branding, client relationships and hiring. BWI partners have conducted more than one thousand off sites and management conferences in 50 cities. Originators of the TopGunSM recognition program and manager of the TopGunSM Club, BWI represents TopGunSM talent and offers placement services to clients seeking game changer executives and revenue generating professionals.
Related Links:
www.TopGunPress.com
www.brendanwood.com
Contacts:
Jordan Novak
Managing Director Brendan Wood International
+1 416 924 8110
jnovak@brendanwood.com
Amanda Knott
Manager – BWI Panel Brendan Wood International
+1 416 924 8110
aknott@brendanwood.com
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