post-trade infrastructure and established workflows can help clients navigate the risks of failed trades, manage liquidity demands, and ensure compliance in a T + 1 world.
More broadly, regulatory expectations around outsourcing arrangements themselves are growing. Authorities are increasingly focused on governance, transparency, and risk management, making the decision to outsource more complex but also more compelling. Providers that can demonstrate strong compliance capabilities and resilient infrastructure are well positioned to win mandates from managers who would rather rely on external expertise than attempt to meet every regulatory challenge internally.
Another factor that cannot be overlooked is the transformation of the providers themselves. The landscape of outsourced trading firms of 2025 bear little resemblance to the niche specialists of a decade ago. Today’ s providers offer global desks, multi-asset execution, advanced technology platforms, and seamless integration with custody and middle-office functions.
Custodian banks such as BNY Mellon, State Street, and Northern Trust have invested heavily, positioning outsourced trading as part of a broader ecosystem of services. At the same time, independent boutiques continue to thrive by offering agility, bespoke solutions, and conflictfree execution. Our proprietary survey shines a light on all these providers. New entrants such as Clear Street bring a technologyfirst approach, potentially appealing to clients looking for modern infrastructure and innovation.
The result is that outsourced trading is no longer a compromise or a secondary option. Instead, it has become a credible, competitive, and often superior alternative to running a desk in-house. For asset managers, this evolution expands the set of drivers for adoption. They are no longer simply outsourcing to cut costs or cover a gap; they are doing so because providers now offer capabilities and sophistication that rival or exceed what many could achieve internally.
However, from the buy-side perspective, sentiment remains unenthusiastic when it comes to the continued outsourcing movements.
As one buy-sider tells The TRADE:“ Many senior management teams underestimate the value of an in-house trading desk. Outsourced desk orders become something to process and‘ get done’, with little awareness of market impact or execution nuance. And since brokers treat outsourced desks as sell-side, their liquidity access is far narrower than true buy-side traders enjoy.”
They add:“ A major point often missed: the real cost of trade execution isn’ t eliminated- it’ s simply passed from the asset management firm, to the client, as it’ s generally funded via trading commissions.”
The time is nigh Taken together, the picture that emerges is of an industry whose growth is propelled by a convergence of pressures and opportunities. Operational efficiency remains the headline motivator, with three-quarters of survey respondents citing it as their primary reason for outsourcing. But the ability to grow while managing costs, the challenge of finding and keeping skilled traders, the burden of regulatory change, and the rising complexity of market structures all feed into the same conclusion. Outsourced trading has become not just a tactical option, but a strategic imperative for the modern buy-side.
The forces shaping demand are deeply entrenched and unlikely to fade any time soon. Efficiency, growth, and talent are no longer temporary concerns; they are structural features of the market environment. Providers who can address them will continue to attract clients, while those that cannot, will find it increasingly difficult to compete.
The next phase of outsourced trading’ s evolution will likely hinge on how these drivers interact. As efficiency concerns escalate a world with rapidly changing market structure, globally fragmented settlement cycles and future regulatory reforms, the difficulty of hiring qualified talent will only compound the pressure. At the same time, as providers expand their capabilities, asset managers will face a more attractive set of options than ever before.
In this sense, the industry is both responding to client needs and shaping them. Outsourcing is no longer simply a way to cope with constraints, it has become a way to unlock new possibilities.
Overall across the industry, the message of 2025 is clear. The drivers that once made outsourced trading an optional support function have become central to the realities of modern asset management. Efficiency, cost control, talent, regulation, and capability are converging to make outsourcing not just desirable, but in many cases unavoidable.
2025 // Outsourced Trading Handbook // 15