For cost-conscious, performance-driven firms, outsourced trading offers a new way to grow.
Alpha recently partnered with a leading £25bn UK Asset Manager, BNY Buy Side Trading Solutions (“BTS”), and BlackRock to successfully deliver a full outsourced dealing model with a phased approach in under a year—demonstrating our ability to drive complex transformation at pace. This article explores the growing trend of Asset Managers outsourcing their dealing functions and highlights how Alpha’s deep expertise can guide you seamlessly through every stage of the journey, from initial vendor selection to full implementation.
Why do managers consider outsourced dealing?
In an increasingly competitive market, Asset Managers face the challenge of excelling in portfolio performance to deliver the best service to clients, while simultaneously cutting costs, leveraging advanced technology, and accessing superior data sets. At the same time, they must navigate and comply with everchanging regulatory obligations. Outsourcing dealing provides a strategic solution that enables Asset Managers to ‘do it all’ by enhancing operational efficiency, reducing expenses, and ensuring compliance, thereby allowing them to focus on their core investment strategies and client outcomes.
Is it all or nothing?
Asset Managers have moved from segregated dealing to centralized dealing for greater efficiency and control. Now, many are ready to take the next step with outsourced dealing—fully or partially delegating trade execution to specialists. The best part? You do not have to outsource everything at once. You can gradually outsource selected asset classes, keeping your traders focused on the complex trades while gaining flexibility and efficiency.
Benefits of outsourced dealing
The reasons for outsourcing dealing are compelling, with clients typically benefiting across four main areas:
- Simplified Operating Model: Improved operational efficiency, reduced total platform cost of ownership, lower operational risk, and increased opportunities for scale.
- Streamlined Processes and Systems: Greater scalability, enhanced flexibility to adapt to market and regulatory changes, and increased efficiency through reduced complexity and clearer accountability.
- Enhanced Trading Capabilities: Expanded broker network, better access to liquidity across asset classes, and availability of out-of-hours dealing.
- Cost Savings: Decreased user-based license fees, savings from legacy contract decommissioning, reduced headcount costs, and typically lower broker fees or access to improved rates.
What opportunities exist to accelerate delivery and reduce risk of such a large transformation?
Outsourcing dealing is far more than a technological shift—it reshapes a firm’s organisational design, regulatory compliance, and best execution reporting. At Alpha, we have done it before, and our extensive implementation experience means we know exactly where the risks lie, allowing us to proactively address potential pitfalls and keep your project on track.
- Strategy and Selection: We deeply understand what matters most to clients when choosing an outsourced dealing model and vendor, while ensuring your strategy aligns perfectly with your goals.
- Operating Model and Process Design: With off-the-shelf operating models and process blueprints tailored to the asset management industry, we craft solutions uniquely suited to your business needs.
- Implementation: Our experience and insights into outsourced dealing implementation challenges enable us to build robust plans that anticipate and mitigate risks, establish strong project governance, and engage the right experts at the right time. Leveraging our enterprise transformation expertise, we accelerate delivery and deliver results.
Having successfully guided clients through this journey before, Alpha is your trusted partner to ensure a smoother, faster, and more reliable transition to outsourced dealing.
