AT A RECENT meeting with a large European buy-side firm, I asked the key question defining the financial industry today. "In your opinion what will be the broker of the future?" The head of trading at the firm, one of the most highly regarded in the community, looked at me smiling, taking his time before saying: "You". I looked a bit confused and said: "But I am not a broker and never will be!" He replied: "This is exactly my point". Silence.
Could it be true? Could it be that the future of the brokerage industry is not brokers as we know them today but a loose network of connection points to a community with value-added services – such as market making, data providing, clearing or investing – embedded in the network itself? Could the burst of technology innovation in the financial arena fundamentally redefine the role of all its players?
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