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After experiencing a number of brokerages over the years and the with
the evolution of affordable online interfaces that accommodate basket
trading and portfolio rebalancing (to name a few features), the
importance of choosing a prime brokerage has grown significantly, in my
opinion. For example, I'm noticing more trading platforms able to handle
increasing complexity which brokerages are delivering free of charge to
buy a relationship.
However, it's going to become (if not already) quite a pain to change
brokerages just to take advantage of yet another "great" interface. I
think it's preferable to move clearing to a prime brokerage and DVP with
anyone who has a trading platform you'd like to use or try. It adds to
fees a little, but it allows one to adopt technologically superior
platforms very quickly and doesn't interrupt business or cause
relationships to go by the way. An emerging marketing frontier for
brokerages that'll make sense to prospective customers is the value they
can deliver through the provision of advanced and packaged technology.
Now comes a challenge for which I'd appreciate some input. How to choose
a prime broker? I can't find anything on the Internet that is a
checklist let alone a comparison of prime brokerages. Where does one
start to instill some level of objectivity in the selection process? I
think it's a very important decision, particularly as the industry moves
towards settlement of T+1 and there'll be many "great" platforms to try.
I've looked at 3 platforms in the last month alone. To put them in
perspective, I'm of the opinion that TradeStation is soooo toy-like when
it comes to trading platforms. In a nutshell, TS are toast in this area.
Hope to see read other opinions.
Colin West
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