A Qualitative Survey of Sell Side Brokers

Greenwich Associates is a third party research company that advises sell side firms on how they are currently serving their clients and how they can improve.  A review of the www.greenwich.com website lists a wider mission statement that includes both sell and buy side firms.  In this article, we will concentrate on the sell side survey.

The survey starts when Greenwich sends out a list of the buy side firms that will contribute.  The usual suspects are on the list:  Fidelity, Capital Group, Wellington Management, etc.  For these firms, the sell side nominates the contact who will receive the survey.  Also, the sell side is encouraged to add new firms to the list.  This helps Greenwich give the sell side more robust results and add new customers.  The contact for any given buy side firm is by majority vote.  So if 6 firms have John Smith as the contact and 5 firms have Pete Jones, then John Smith will be listed as the official contact.  This is called "ballot stuffing".  Obviously, if John Smith receives the survey, then the 5 firms that speak primarily with Pete Jones will be at a disadvantage.

I have not seen the questionaire but it is qualitative in nature.  These answers are compiled into a rating score on a scale of 1 to 1000.  A total result is given for the entire universe of accounts.  Then ratings are given by each role within equities:  research, research sales and salestrading.  They can be further sliced and diced by account coverage.  For any result to be statistically significant, a minimum of 5 firms have to fill out the survey.  Greenwich also provides account profiles that contain feedback from the buy side firms.  The contents are confidential to sales management.  The salespeople and salestraders covering the account are not to be informed.  However, I always wondered about it.  If the buy side tells sales management of the investment banks on how to improve client service, how would management broach the subject to their staff without giving away the source?  Especially after the Greenwich survey has been published.