Why Underestimating the Wholesale Approach is a Mistake

Do you consider yourself a low-maintenance and quality client for your investment bank? If so, you’re not alone – many of the investors we talk to feel this way.

Unfortunately, if you’re printing less than £100 million a year and speak to your banker at least once a week – although probably more – then you could be in for a rude awakening. In fact, every time you pick up the phone to get in touch, your price will typically get worse.

Emma Davidson, director and founder of Affinity Capital, says it should be no surprise that high-touch clients find themselves encountering less than favourable prices over the long run.

“The trading floor is more understaffed than ever and there is more pressure to deliver in an environment that is plagued by meetings, regulations training, culture committees … the list is endless,” she explains.

“If you can make your business one that is legitimately considered wholesale and low maintenance to achieve the efficient and wholesale pricing that you and your clients can benefit from – why would you not do it?”

However, wholesale pricing will require you to achieve efficiencies across the entire spectrum of your intended trade – all the way from idea generation and administration through to settlements and after-trade care.

How Affinity Capital can help

According to Emma, undervaluing the wholesale approach can have a detrimental effect on many different areas of the trade throughout its lifetime. But clients need more than just a contact at investment banks to get on the right track.

“People believe that talking to the investment banks directly gives them some sort of credibility or insight,” she states.

“This is only true if you can use and interpret the information you are given properly and the banker is giving you the quality product you deserve. Just having a direct line to the trading floor does not guarantee you the best pricing.”

Instead, working with experienced and knowledgeable partners in the structured investment space can help you achieve some of these advantages. A successful partnership means you can focus your attentions on what you do best, while still benefiting from best execution on your trades.

Affinity Capital provides a range of services across structured investments and derivatives, including state-of-the-art pricing models, the latest technology and sophisticated administration processes.

If you would like to learn more about how Affinity can bring increased value to clients, please contact us today on 020 7297 2816 or email at enquiries@affinitycapital.co.uk.