LeapRate Exclusive… LeapRate has learned that two senior FX sector executives in the London office of global banking giant UBS AG (SWX:UBSN) have left, to form their own consultancy serving brokers and large FX and fixed income trading entities on both the buy and sell side.
The two are Richard Longmore, Managing Director and Head of European FX Sales at UBS since 2010, and Sandeep Varma, Head of Client Strategy – FX, Rates and Credit EMEA who has been with UBS since 2012. The two also worked together previously at the Barclays Capital unit of Barclays PLC (LON:BARC), where Mr. Longmore was a Managing Director from 2006-2010 and Mr. Varma was COO from 2003-2009.
Finoesis states that it provides tactical and strategic consulting to senior management enabling sell-side, buy-side and other participants in financial markets to optimise their businesses. Its services revolve around revenue growth, broker reviews, sales efficiency and trading book reviews, as follows:
Although the revenue pool for the sell-side has been shrinking, it is still substantial and highly concentrated. The historical focus for sales teams has been in leveraging existing relationships to grow revenues. In our experience there has been a lack of rigour in understanding and targeting profitable pockets of addressable wallets within the buy-side, and building a partnership that is of mutual benefit.We start with a detailed and objective understanding of a banks’ own platform, implement a comprehensive account review process that considers factors impacting profitability and performance, and highlight opportunities to develop key relationships with the right client executives Our approach is tried and tested and has the potential to deliver significant additional market share.
Broker reviews provide a key opportunity for buy-side players to develop partnerships with the sell-side that enhances their business. However, most often the depth of discussion is at too high a level to allow a meaningful and sustained improvement, leading to frustrations and a sub-optimal dialogue.We work with the buy-side to develop detailed qualitative and quantitative perspectives of their relationships, weighting inputs to create comprehensive scorecards. We assist in comparing the value of the services received with business offered and consider how the partnership can be optimised. Our approach combines best in class thinking from a large number of reviews with an understanding of the inner workings of sell-side divisions.
Rather than being developed top down, sell-side sales organisational structures typically evolve, often resulting in structures that do not best match what clients consume and their preferences around how they consume. This has led to inefficiencies which are compounded by career and remuneration incentives not necessarily aligned with profitability goals. Our approach to channel management deploys resources to where they are most valued. This creates efficiencies in the organisational model without decreasing revenues, and potentially even enhancing them. Any organisational change can result in uncertainty, and we bring our hands-on experience to minimise the impact of any disruption in a practical fashion.
Trading Book Reviews
We provide a neutral independent review of our clients’ trading operations. We will benchmark aspects of trading quality across multiple dimensions including spread retention, positioning and leveraging of the client franchise. We will consider the effectiveness and usage of risk limits, the management of illiquid risks, and the nature of capital consumption by type of risk. Our deep experience allows us to provide a considered commentary on our analysis across a large number of parameters, and recommendations for improvements to the bottom line.We can also report on the strength of infrastructure and trading set-up, its readiness against market and regulatory evolution and recommend appropriate and cost effective changes.