Firms Pay More for Bond Traders Even as Tech Rises, Study Says

  • Compensation and technology costs increased 4 percent in 2015
  • Almost 70% went to fixed-income traders' pay, up from 62%

Asset managers are increasing the amount they spend on compensating fixed-income traders even as markets are increasingly driven by technology.

Trading desks buying stocks, bonds and currencies spent about $15.6 billion on pay and technology in 2015, a 4 percent increase from the year prior, according to a report Wednesday by Greenwich Associates. The growth was driven by increases on fixed-income desks, where 70 percent of the spending last year went to compensation -- up from 62% in 2014. The balance went to technology costs, the study said.

The growth of electronic platforms requires traders to have more technical stills, the report said. “Technology is only as good as the people behind it, and buy-side trading desks are putting their money where their mouth is,” said Kevin Kozlowski, a Greenwich analyst and author of the study.

The increasing budgets at buy-side trading desks contrasts with some investment banks on the sell-side that have reducedstaff. Traders on the sell-side say stiffer Wall Street rules and near-zero rates have eroded returns.

The findings by Greenwich, a provider of advisory services, are based on a survey of 258 buy-side traders globally in August and September 2015.