Being a Broker in 2019 Is ‘a Challenge Financially’
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Being a Broker in 2019 Is ‘a Challenge Financially’


But the sell-side’s best firms — as ranked in the 46th annual Extel survey — are not backing off from Europe.

The past year and a half has been a “challenging” time for European brokers.

“When it comes to MiFID, the regulation is a challenge for research. It’s a challenge financially for brokers. It’s a challenge from the standpoint of clients consuming less content,” said Eric Lopez, head of Europe, Middle East, and Africa equity research at Bank of America Merrill Lynch.

According to Lopez, last year’s update to the Markets in Financial Instruments Directive — which requires that investment research be sold as its own separate product in Europe, rather than being bundled with trading and execution — has had a significant impact on the sell-side research providers servicing European investors. “Distribution of our content is a little more challenging than in the past,” he admitted.

BofA Merrill Lynch is facing these challenges head-on by investing “heavily” in its European and thematic research, as well as continuing to strengthen the U.S. bank’s position as a global provider. “The fact that we offer everything, everywhere is a peer advantage,” Lopez said.

It’s an advantage that can’t be denied: Large, global banks dominated the 46th annual Extel ranking of European brokers, with BofA Merrill Lynch leading the pack as this year’s best overall broker.

The American multinational firm also placed second among emerging Europe brokers and third in the developed Europe category. It was voted the No. 2 firm in both sector research and overall research, and ranked as the top provider of equity execution – among other accolades.

[II Deep Dive: Small Brokers, Macro Research Among the Early Losers of MiFID II]

Other winners in this year’s survey included UBS — ranked the best overall research firm — and JPMorgan Chase & Co., voted the top equity sales firm.

In all, the 2019 survey was a victory for bulge-bracket banks — and a major comeback for BofA Merrill Lynch, which failed to crack the top-five in last year’s ranking of the best overall brokers. Lopez mostly shrugged off the 2018 result, noting that firm had suffered turnover which could’ve brought down its ranking. This past year, he said, BofA Merrill Lynch has been “much more stable than a lot of other platforms,” which he said has helped the bank regain its strong position among clients.

“We try to offer a high quality of service across as many products as possible,” Lopez said. “We’re not always No. 1, but we are a strong investment bank across most products.”

Outside of the bulge-bracket banks, top firms in this year’s Extel survey included European brokers Exane BNP Paribas, HSBC, and Kepler Cheuvreux.

Exane BNP Paribas, last year’s best-overall broker, placed third in that category this year but picked up a No. 1 finish in the developed Europe category. The Paris-based firm also placed first in sector research, while slipping to third place in overall research.

HSBC, meanwhile, was voted the best emerging Europe broker, while Kepler Cheuvreux took first place in the overall execution, overall sales, and corporate access categories.


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