Low commissions threaten bonuses
Equity sales staff hoping for bumper bonuses on the back of rising volumes may yet find their hopes scuppered by a squeeze on commissions.
A report by consultancy firm Greenwich Associates found total commissions paid to brokers on all equity trades rose just two per cent in the first quarter of 2006, the Financial Times reports today.
Greenwich attributes the negligible rise to tough price negotiations from European fund managers, portfolio trading, and the growing use of direct market access systems.
The director of European research at one investment bank told eFinancialCareers.com competition for commissions is strong, but the revenue picture going forward is unclear. "Given that volumes have increased, it's tough to tell whether this will have much of an impact," he says.
