Bank of America Merrill Lynch ranked first among the top U.S. equities trading houses in an annual survey conducted by Greenwich Associates. The win comes against a backdrop of declining commissions and retrenchment across the Street.
“We’re pleased with this number one ranking in the Greenwich survey,” Henry Mulholland, Merrill’s head of Americas equities, told Traders Magazine. “We think it reflects our clients’ confidence that we can offer quality execution, expertise in providing liquidity, and deep market insight.”
Of the five bulge bracket shops at the top of Greenwich’s list, Merrill scored 9.1 percent in the survey of 294 asset managers. Morgan Stanley was second with a score of 8.4 percent. Credit Suisse, J.P. Morgan, and Goldman Sachs all had scores of 8.1 percent.
The scores reflect a broker’s relative importance to the buyside institution, according to Greenwich. That is decided by two factors. First, it depends on the amount of business a broker does with each money manager. Second, Greenwich factors in the size of the manager based on its commission spend with the entire sellside community.
Merrill may have taken the biggest slice of the pie when compared to its peers, but the whole pie shrunk considerably in the past year.
According to Greenwich, institutional commissions totaled $9.3 billion in the year that ended in the first quarter of 2013, down 15 percent from the prior year.
“The major brokers have concluded that trading activity is unlikely to bounce back to pre-crisis levels,” Greenwich Associates consultant Jay Bennett said in a statement. “As a result, they are downsizing their own businesses to maintain profitability in an environment of lower trading volumes, fewer commissions and less revenue.”
If Goldman Sachs is cutting back, it hasn’t hurt its standing with the buyside yet. Greenwich picked Goldman as the “Quality Leader in U.S. Equity Trading.” That means Goldman’s quality rankings exceeded those of its peers by a “statistically significant margin.”
