Outsourcing Hits Buy-Side Traders as Firms Look to Trim Costs

The video discusses the challenges asset managers face due to the growth of the passive industry, leading to cost-cutting measures. It highlights the high costs of trading desks, prompting many managers to outsource trading. By 2022, a significant portion of investment managers are expected to outsource trading. The impact of electronic trading and automation is also explored, with a focus on the shift from in-house to outsourced trading strategies, even among large firms.

What is one of the main reasons asset managers are under pressure?

• The growth of the passive industry

• The rise in the number of asset managers

• The decline of the passive industry

• The need to increase trading desk costs

According to OP Mass, what is the estimated cost of one trader?

• $500,000

• $100,000

• $1,000,000

• $50,000

By 2022, what fraction of investment managers with $50 billion or more in assets is expected to outsource trading?

• One tenth

• One fifth

• One fourth

• One third

What has been a significant factor in the shift towards outsourcing trading?

• The decline in asset management firms

• The rise of electronic trading

• The increase in manual trading

• The growth of small asset managers

What might influence a large firm to keep trading in-house?

• Having less than $500 million in turnover

• Having more than $500 million in turnover

• Having more than $1 billion in turnover

• Having less than $1 billion in turnover