attractive. Clients consistently highlight the personal service, flexible fee structures, and cultural fit that independents provide.
From the buy-side perspective, one head of trading affirmed that“ outsourced trading has attracted plenty of attention lately as cost cutting pressures ripple through the industry, but for many firms it remains a double-edged sword.
“ The model undoubtedly offers cost relief for smaller firms, yet those efficiencies are swiftly diminished as assets scale. It’ s the classic trade-off between explicit and implicit cost: the explicit savings on paper may be appealing to buy-side corporates, but they often obscure the lesser understood implicit costs tied to trade implementation.”
Moreover, independents have demonstrated resilience in the face of larger entrants. The departure of UBS, rather than displacing them, has created opportunities for talent acquisition and client wins.
The theme of consolidation looms over the industry though there has been zero activity since State Street’ s acquisition of CF Global which completed at the start of 2024. Given the opportunity at hand, larger firms are still investing heavily and would likely be open to acquiring scale, geographic reach, and asset class expertise if the right opportunity arose.
Hiring battles and personnel moves The UBS exit also triggered a wave of personnel reshuffling, highlighting the degree to which outsourced trading is still dependent on high-skilled personnel on the provider side. Several high-profile hires have been announced across the industry, as providers seek to deepen buy-side relationships and strengthen specialist desks. Many of these have arrived from the buy-side, with additions at BNY from Liontrust a recent example.
For clients, the movement of experienced traders can be just as important as a provider’ s technology stack or geographic footprint, something which has been evident in The TRADE’ s survey, where exits or additions are frequently commented on in the written sections of the research.
When it comes to this topic it is one where traditional asset management desks have consistently asserted their doubts.
Another buy-sider tells The TRADE,“ For small firms trading highly liquid assets, it can make sense, they don’ t need their own desk. But most firms that have outsourced trading have been under AUM pressure and cutting costs, not making a strategic choice. It usually comes at the expense of liquidity access and alpha capture. Not good for the funds themselves.”
Another buy-sider speaking on the condition of anonymity added that the continued movements could likely have a detrimental affect on established, proven processes across the buy-side.
“ The PM-trader relationship, which is the heart of the buy-side, will likely be fractured given potential conflicts of interest on the outsourced desk.”
While many asset managers view their outsourced trading partner as an extension of their internal desk- making continuity, trust, and market expertise essential, this is not the experience of all.
8 // Outsourced Trading Handbook // 2025