BondDesk announced Monday a partnership with Trade West Systems that creates a “retail supermarket for bonds” giving investors broader access to individual bond sales via third-party platforms that compete with the BondDesk automated trading system (ATS).
BondDesk, which executes roughly one-third of all retail bond trades, is enlarging its clients’ access to bonds using a data automation solution from Trade West Systems, a division of MarketAxess Technologies Inc.
“The crucial innovation here is that we’re extending what we have always done to include the inventory from competing platforms,” said Chris Shayne (left), senior market strategist with BondDesk, in an interview with AdvisorOne. “Now, we are not only aggregating inventory from dealers with whom we have our own relationships, we are aggregating inventory from other ATS platforms that do exactly what we do. So if you’re a distributor from Wells Fargo or Raymond James and you’re using BondDesk to source your bonds, now the number of bonds at your disposal has gone to the maximum of what is available.”
The BondDesk-Trade West solution is available to the dealer community effective immediately but is not mandatory. “It’s only for our clients who want to opt in,” Shayne noted.
BondDesk brings “the best possible markets” to financial advisors by reducing fragmentation and increasing transparency across the retail fixed-income market,” said BondDesk CEO Kim Bang in a statement. “By in effect creating a retail supermarket for bonds, ATS aggregation will provide our clients the widest possible range of fixed income offerings and liquidity.”
Since 1997, BondDesk has allowed financial advisors to source bonds electronically from multiple liquidity pools from fixed income dealers, consolidating feeds from over 200 dealers within its ATS. BondDesk now links to a network of more than 2,000 additional broker-dealers and more than 125,000 investment advisors. On an average day, the BondDesk ATS posts more than 100,000 live and executable offerings and handles over 20,000 transactions with a value of more than $1 billion.
Recent investor demand for fixed income products has led firms to provide greater access to the notoriously opaque bond market. For example, Schwab’s Advisor Center now lets advisors and retail investors shop online for individual bonds and Fidelity’s Fixed Income Quick Searches helps investors sort through 30,000 individual bonds using either a name or CUSIP search.
In early 2012, BondDesk plans to release its TrueMarkets Aggregator, an enhanced version of the solution with Trade West that will remove so-called “phantom liquidity,” meaning bids for identical bonds on multiple liquidity platforms. BondDesk TrueMarkets uses a proprietary algorithm that finds and eliminates duplicative liquidity.
Read about BondDesk’s retail bond-trading platform for financial advisors and wealth managers at AdvisorOne.com