The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

EUROPEAN BROKERS SURVEY: How to survive in European broking

Stockbroking is now concentrated in a very few hands. Fund managers are much more sophisticated, withdedicated dealing desks and in-house analysts. Andrew Capon looks at what's beengoing on behind the results of this year's ninth annualEuromoney/Global Investor European brokers poll

European stockbroking is facing further consolidation in the next few years. Forthose firms not in the top half of the tables for pan-European research andexecution and for those that fail to make the top three slots in the individualcountry tables, survival will not be easy.

That is the stark conclusion of this year's European brokers' survey. Askedwhether the number of brokers they use in European markets is rising, falling orstable, over two-thirds of responding fund managers replied that the number wasfalling or stable. Although in the past 18 months there has been a flurry ofacquisitions among brokers jostling to cope with these new competitive realities- ABN Amro's acquisition of Alfred Berg, Merrill Lynch's acquisition of theUK's Smith New Court, Spain's FG Inversiones and Carnegie's Italian business, andDresdner Bank's acquisition of Kleinwort Benson - it is clear thatconsolidation is far from over.

As fund managers choose to deal with fewer brokers, so commission isconcentrating in fewer hands: the rich are getting richer. The rest will go thewall, be acquired, or develop a strategy that will allow them to survive on alower percentage of a commission pot that is still, overall, expanding.

The degree of commission concentration varies from fund manager to fundmanager, but it is now fairly typical for a hard core of 10 brokers to receiveapproximately 70% of all commissions in Europe.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree