The Pained Trader: the price is right

The Pained Trader pitches his package.

  • By The Pained Trader
  • 19 Oct 2017
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More fuel was added to the flaming funeral pyre of my so-called career this week when a client emailed me an enquiry into how much I intend to charge him for my basic package. 

After a moment of obscene sexual reverie, I registered this question pertained, as almost everything does these days, to MiFID rather than what swings between my haunches. This industry is nothing more than the aggregation of such minor humiliations, and being asked for something so tawdry as attaching a price to what I offer clients, and then quantifying it, I find both vulgar and demeaning. There’s a line in there about knowing the price of everything but the value of nothing but it will require a proctologist to extract it.

As MiFID II looms, every service offered by investment banks must have a number beside it and of course, because this industry is cut-throat and short-term, this number then, is visibly shrinking like an unwelcome erection in the race towards zero. 

The bidding war to undercut what other brokers have laughably suggested is the absolute lowest they will go for a bundle of research services has been ferocious before MiFID II has even been implemented.

Most brokers are lowering the cost of their research set menu on a daily basis.

Time for some Schadenfreude

Forgive me for feeling a sense of Schadenfreude here. For years, I toiled away at low-quality bucket shops without a real product or decent research, unable to put up a fight against other brokers, and now all these things which set my competitors apart — analysts, conferences, corporate access, deal-flow and the like — are all being rendered worthless by the officious hand of the regulator. 

It’s just a shame this development should happen just as I arrive at Salvation Bank, an institution replete with conferences, analysis, corporate access and deal flow.

Best execution is now a concept for which fund managers are expected to pay separately. I never advertised my trading as such because such self-promotion is not only tasteless but mendacious. It's such a subjective concept — determining not just what is ‘best’ and for whom it is ‘best’ (unconvinced? I don’t blame you).

I did occasionally manage it, mind you, usually accidentally and as a result of my own shambling incompetence.

As someone who likes to think of himself as a "business growth enabler" (as the account manager where I bank described herself today) I took umbrage at my package and what I serve up to customers being referred to as basic. 

However, when I started to break down exactly what I offer in the vain expectation of payment, I could see why he might ask the question, and why he might cavil at my response. 

Brown clients

I used to colour code my clients, a bit like British Airways (by the way BA sent me an email last week to "congratulate" me on being downgraded to Bronze) except most of mine were herded into the brown category.

Brown clients can expect me not to call them or contact them or even acknowledge their existence. I have tailored this offering carefully. They are known, and they may offer lucrative revenue streams, but through a combination of indolence and diffidence I do not make the slightest effort to cover them. Many brown clients were not actually aware that they were my clients at all. 

I honed a style of stockbroking I characterised as benign neglect and it has spared everyone involved a great deal of inconvenience and me a lot of rejection.

So the answer to this particular client’s request for the price of my sales-trading services is “free of charge”. To comply with MiFID II regulations, fund managers must regularly assess the quality of the service offered by brokers and decide whether it represents value for money for their clients. 

Free sounds about right to me. It’s not worth a penny less, or a penny more.

In the past I would tier clients very carefully to ensure there was an equitable hierarchy and everyone (excluding me, naturally) received their just desserts. 

For example, someone seated in my bronze lounge could not expect an outgoing phone call, especially if he/she were on the continent and had a long telephone number which I could not be bothered to dial. 

Silver members, if they deigned to place an order with me could expect me to give them a fill upon completion, unless I went out for lunch, in which case they could very well wait until the trade confirmation arrived a day later. 

Gold card holders would receive pretty much the same stuff but could expect me to wait until I slammed the phone down before calling them something obscene.

There were some fringe benefits to gold membership, but often they were not perceived as such. 

Late night phone calls when drunk I regard as the very essence of friendship but this is not the consensus. Jovial phone calls when drunk during the trading day were also something of a hit-and-miss affair but people seemed to like them.

I have discontinued this painstaking delineation of clients and now they are all shovelled into the same Rainbow bucket and their indifference and contempt is reciprocated with equal fervour.

The platinum client

If, however, I like you as a client and I think you are a decent human being, and you speak fluent irony, and you are well-read and sensitive and you treat me with candour and amity and you can self-deprecate with the best of them (that’s me) and you shun popular culture (or like me, pretend at least) and you like Showaddywaddy and Shostakovich and once in a blue moon perhaps you throw this dog the occasional bone… if you are all these things, you can expect the following by way of Platinum service from the Pained Trader in The Time Of MiFID II:

A phone call complaining of a hangover most days

A phone call complaining of a broken heart most days

Emails complaining about both of the above, often simultaneously

The articulation of incurable despair

Unexpected and often inappropriate expressions of the deepest, most tender personal feelings

Unexpected and inappropriate expressions of homicidal impulses and violent ill-will to many of my fellow men

Some stockbroking from time to time

No stockbroking most of the time

In-depth discussions of wine, books, poetry, the intensifiers of Martin Amis, Russian historical misery porn, politics, sport, the curvy things attached to women, abroad

Listicles of My Top 10 Tossers In The City/Women Who Rejected Me/ Everton’s Worst Strikers and so on and so forth

Detailed descriptions of low-life written in a high style

Embarrassing revelations of sexual incontinence (unless you are an attractive, voluptuous brunette in which case I shall make an exception)

A weekly exegesis of what happened on University Challenge

The reiteration of many ‘a funny thing happened on my way to the office’ anecdotes.

The reiteration of ‘I had an utter nightmare yesterday’ anecdotes

The implied sinister threat of my unwavering and nemetic enmity if the friendship falters

Post-modern sales trading

My loyal and implacable friendship

The good news for clients is that this platinum service offering all these perks of membership is going for a song at about £1m annually from January.

The good news for me is that I only need one client. Is it you? If only it were so.

  • By The Pained Trader
  • 19 Oct 2017

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 390,564.78 1474 8.99%
2 JPMorgan 358,442.23 1626 8.25%
3 Bank of America Merrill Lynch 344,395.33 1215 7.93%
4 Goldman Sachs 257,185.44 862 5.92%
5 Barclays 252,851.12 991 5.82%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 HSBC 36,645.46 176 6.31%
2 Deutsche Bank 36,386.11 128 6.26%
3 Bank of America Merrill Lynch 30,712.91 97 5.28%
4 BNP Paribas 30,600.75 184 5.27%
5 Barclays 30,394.96 86 5.23%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 21,398.51 94 8.80%
2 Morgan Stanley 17,329.08 90 7.13%
3 Citi 16,974.50 104 6.98%
4 UBS 16,643.68 66 6.85%
5 Goldman Sachs 16,179.39 87 6.66%