2011 Sell-Side Survey Results

Key findings

  • 28% of sell-side participants said accurate risk assessment was their biggest challenge.Most respondents planned to make some adjustment to their risk management strategy. The most popular adjustments included greater analysis and awareness of model risk(51%) and carrying out stress testing and scenario analysis (46%). The most important type of risk analysis mentioned by the sell-side respondents was Monte Carlo VaR (31%).
  • Other areas seen as a challenge for the sell-side are independent pricing and valuation (21%) and regulatory compliance (20%).
  • Over the past 12 months, major changes have been taking place in the regulatory landscape. As a result, it was no surprise that 62% of the sell-side respondents felt that there would be a moderate or major impact on their business.
  • 69% of sell-side respondents reported using third-party analytics exclusively or in conjunction with their in-house system. And when they evaluate a third party analytics platform, easy to use/implement (45%) and transparency into the models (45%) topped the list for the sell-side as the most important features. Other factors that were also important included adaptability to changing market conditions (42%) and strong support services (41%).
  • With all of the changes taking place in the market, it was not surprising that most sell-side (53%) respondents expected to spend more on IT in 2011. Systems and tools need to be updated in order to meet the needs of an ever-changing marketplace.