The collapse of two U.S. equity trading firms this month suggests difficult market conditions are likely to keep claiming small shops, jeopardizing the jobs of scores of stock analysts, traders and the salespeople who hawk stock research.
Ticonderoga Securities, which last year purchased stock research firm Soleil Securities Corp, is closing its doors on Friday, confirmed Richard Sgueglia, head of global equity sales and trading at Ticonderoga. The company has 74 employees, including 14 analysts, according to its website. That's down from 21 analysts when the purchase was announced in May.
WJB Capital Group, started by New York Stock Exchange floor brokers in 1993, shut its doors early this month after recently beefing up its analyst force.
Both companies are agency brokers, meaning they execute stock trades for hedge funds, mutual funds and other institutional investors but do not put up their own money to complete the trades.
It's always been a business with razor-thin profits, but the model has been pummeled in the last two years by falling trading volume, rising competition from all-electronic trading venues and direct access to brokers on exchange floors and continually falling commissions.
To differentiate themselves to their hedge fund and mutual fund clients, agency equities firms have been adding ancillary services such as research, advice on the most efficient trade execution, fixed-income trading and even investment banking services such as privately raising money for public companies.
"Very few businesses make it on execution-only anymore,…."
Read more at http://in.reuters.com/article/2012/01/27/ticonderoga-death-idINDEE80Q01O20120127
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