Institutional dealing costs are "clearly material", according to one of the most comprehensive reports ever completed on the matter. The report by the Institute for Fiscal Studies (IFS) found that in 2011-12 there were £2.3bn worth of deals done between firms and their clients. A detailed breakdown revealed that relatively high allocations to private assets contributed to the high number, with equities and bond trades incurring average costs of 6bps and 22bps respectively. Greater transparency, prompted by voluntary standards produced by an FCA working group in July, has made obtaining the data easier; the market now needs to determine whether they are reasonable, according to John Simmonds, UK principal at CEM.
Institutional dealing costs are "clearly material", according to one of the most comprehensive reports ever completed on the matter. The study, conducted by CEM Benchmarking, found these “hidden fees” amounted to 20bps. A detailed breakdown revealed that relatively high allocations to private assets contributed to the high number, with equities and bond trades incurring average costs of 6bps and 22bps respectively. Greater transparency, prompted by voluntary standards produced by an FCA working group in July, has made obtaining the data easier; the market now needs to determine whether they are reasonable, according to John Simmonds, UK principal at CEM.