One of the sacred compliance terms in capital markets is “KYC” – Know Your Client. But how well do you actually know your client? And how accurate is what you think you know? And how well does your client know you?

Having spent the last twelve years working closely with the client facing teams on the sell side, and the last two years working closely with broker relations teams on the buy side, I’ve come to appreciate deeply all the communication challenges and gaps. Fundamentally, brokers have a hard time getting information about clients, and clients have a hard time getting information about brokers. There are a few reasons for this:

• Operational organization: clients might ask brokers for a list of everyone ‘sending to or interacting with them’, and information about who they are, where they’re based, their role, what they cover/talk about, etc. Unfortunately brokerages usually don’t have that information centrally organized, outside of formal research coverage. Broker Vote initiatives have helped, but we still hear lots of challenges with the data. On the other side of the street, brokers will ask clients for information about their investment professionals, their roles, and coverage, and the best they can hope for is a PDF of Excel file with some of the information. 
• Regular movement: there is a lot of movement in capital markets. People are changing roles, getting new contact details, etc. This creates a challenge internally: no one likes to update systems, such as the CRM, so they rarely do. They just add the new contact.
• Data integration: lets say a counterparty does send you information about their team (either sell side or buy side). How do you get that data from a PDF or Excel file into internal systems or the CRM?
• Trust: perhaps the most important part of this relationship, sometimes the buy side in particular doesn’t feel ready to share what they were working on with their sell side counterparts. More on this later…

Eventually, the industry came up with a stop gap solution to this problem: asking funds to share a roster. The essential idea was to get a regular update (sometimes even daily, but usually every three to six months) of who worked at the fund, what sectors or names they covered, their contact information, and what team/group/pod they were part of. Funds would send it over, and brokerages would consume the information and plug it into internal systems. It wasn’t a perfect solution: every roster had a different layout and structure, they were inconsistent in what information was included, and had different cadences of updates, but it was better than nothing!

Until it wasn’t. 

The quote “a few bad apples spoil the bunch” would be very fitting here. While the buy side was sharing more and more data about their firm via a roster, a few bad actors started to abuse that trust. There were several cases of sell side individuals sharing those rosters outside the firm: to recruiters, and other funds. The roster became the most in demand document at firms looking to make key hires. No more guessing: want to hire a tech PM? Now you can see exactly who you may want to reach out to across all your competitors. 

While the idea behind sharing a roster was a good first version, the tools to do it securely just didn’t exist yet. Funds pulled back, with a majority of the buy side either reducing the information they shared on their roster, or stopping the sharing altogether. Unfortunately everyone suffers as a result.

The sell side ends up knowing less about its clients: they don’t know how many people are actually at the firm. They don’t know how accurate their CRM is. They don’t have accurate contact information. They don’t have coverage information for trading flow, and product targeting to more effectively service their clients. The buy side has to spend more time helping brokers navigate their firm, potentially miss out on relevant products, and dedicate more administrative resources to communicating with the sell side. 

While the number of anecdotes I’ve accumulated over the last two years with the buy side would require a much longer piece, I’ll share two that stand out:

– one large fund we’ve been working with did a “CRM clean up” with a large broker dealer – the result: 75% of the brokerage’s contacts didn’t work at the fund any more, and their brokerage was missing 25% of the current employees

– after onboarding one large fund, we had a clear picture of their roster: ~500 investment professionals. Across the sell side, we were sending to almost 7000 unique contacts at the fund, representing thousands of stale contacts that no longer work at the fund.

As we’ve been working with our sell side clients, and launching buy side clients, we’ve been spending a lot of time thinking about what the future of ‘client rosters’ looks like. Without getting into too many product specifics, there are a couple areas that we’re focused on:

– making it secure: giving funds clarity on who’s accessing it, what they’re doing with the data, and confidence that it is secure. Giving the ability to rescind access at any time. This should address and solve the trust concerns. 

– making it consumable: being able to distribute the roster in both a human consumable and machine readable format, so your sales person can see it, but also automatically have it plug into internal systems

– making it available: having it available on demand, integrated into systems, and ‘live’, so that the sell side doesn’t need to constantly ‘request’ an updated copy

Additionally, the other surprise has been that the buy side also wants a better sell side roster. They want better clarity into who is sending to them, who those people are, where they are based, what they cover, etc. The buy side wants the same information the sell side wants! They want to use it in their broker vote, in subscription management, when travelling (seeing who they should meet with/connect with in a city), etc.

I joke that the majority of workflows in this industry can be described as “one firm takes their own data, puts it into Excel, attaches it to an email, emails it to another firm, who downloads the Excel, and copies the data into their own system.” We believe that there is a better way, but it will be achieved one workflow at a time. There are no silver bullets.

We’re excited about our plans for Roster Management, and how we’re going to accelerate those in 2025. Giving the buy side the confidence and control of their roster, while helping the sell side better understand their clients, and streamline the integration of their data, and vice versa for the sell side. 

For the sell side, this data also becomes the foundation of more systematic approaches to client coverage, where the relationship manager can spend more time servicing clients, and less time finding and entering data. 

For the buy side, this data helps them better navigate their brokers, find new contacts within existing relationships, understand who’s engaging with and covering them, and spend less time on administrative tasks.

Roster Management is just one of the strategic areas we’re focused on in 2025. We couldn’t be more excited about the year ahead.

We want you to really know your client – and we want them to know you.

As always, if you have any questions, don’t hesitate to reach out. 

Onward and upward,

Blair Livingston

CEO

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