Institutional Brokerages

Advance company interests with institutional broker dealers
By Felicia R. Blue You won’t have a problem finding institutional brokerages - many have sprung up in recent years. Others, such as Instinet, have been in business for many years; they’ve just used the web to expand their institutional clients.
 

Institutional brokerages work specifically with institutional clients. Institutional clients may be corporations, pension funds or insurance companies. They have tremendous influences on the financial markets because they can either buy or sell a large volume of shares. When looking to do business with institutional brokerages, consider the following:

1. Make sure the institutional brokerage firm offers electronic trading.

2. Ensure your institutional broker dealer provides comprehensive investment research.

3. Consider whether the institutional brokerages provide research publications.

Ensure your institutional brokerage firm offers electronic trading

Electronic trading is important when it comes to institutional agency trading. As previously stated, institutional traders place large amount of orders. That's why it's important for institutional brokers to have the latest and most advanced trading platform. Electronic trading platforms should be able to work with various order types, have cutting edge routing capabilities, and have access to Level I and Level II data.
Try: Capital Institutional Services is not only a top institutional brokerage firm, but it provides sophisticated electronic trading. This institutional brokerage firm has been in business for more than 30 years. Alaris Trading Partners, a registered fixed income institutional brokerage firm, has strong relationships with Goldman Sachs Execution & Clearing LP and Banc of America. Alaris offers direct electronic trading.

Make sure the institutional broker dealer provides you with comprehensive investment research

You'll want to see how an institutional broker dealer gets information. Good institutional brokers should have not only their own research analysts, but also have strong relationships with other research firms. The institutional brokerage firms should also meet with representatives from the company's investor relations department. This will enable institutional brokers to have firsthand knowledge as to whether the company is a good investment.
Try: Instinet is one of the top institutional brokerage companies that many institutions use. It provides high-quality investment research. FBR Capital Markets, another institutional brokerage company, provides research tailored to various industries, such as energy and natural resources, technology and telecom.

Ensure institutional brokerages keep you abreast of government policies

Another tool institutional traders should use is research publications. For example, research publications enable institutional brokers to keep abreast of tax or governmental policies. Institutional brokers can determine whether a certain policy will have an effect on an industry. Having this information will help institutional brokerages develop strong strategies for investing.
Try: Morgan Stanley produces several publications, such as Global Economic Forum and Perspectives, that give good information. Institutional Investor has been in business for more than 50 years. Its information is designed to empower corporate executives, government officials, and financiers.

• Know and understand all of the risks, as well as the costs, involved when it comes to investing in various securities. Your institutional broker should provide that information.