Revenue and Trades Fall

Revenue fell 6.2% in the 3rd quarter compared to the 2nd quarter of 2007.  While advisory firms suffered due to a fall in trades, discretionary firms suffered as a result of both trade loss and a drop in net assets won. Although, the execution only firms experienced a slight increase in trades, their revenue was driven down by strong price competition in the market.  However, trades and revenue were significantly up on the same quarter last year. 

Our analysis indicates that some interesting trends are emerging in the market.  It appears both execution only and discretionary firms are also focusing on trades outside the cash market.  While we saw a large increase in CFD trades for the execution only firms, discretionary firms have been increasing their proportion of collective trades. 

Compared to the 2nd quarter, 3rd quarter performance was disappointing.  However, in relation to the same quarter last year, results were much better driven by strategies to cope in a volatile market.

The above highlights are from our quarterly update of key performance indicators, based on data submitted by our wealth management clients.  If you would like to know more or participate in our survey please contact Mike Levy.  (double click and link to contact us page)