Quarterly Benchmark Report Q1 2024: insights across research, sales and trading and corporate access
The Singletrack Quarterly Benchmark Report presents insights and trends to help understand the state of the capital markets advisory industry. We’ve just published the first edition for 2024, and in this article we’ll share some of the key takeaways. For more detail, download the full report.
This time around, we’re sharing insights from across research, sales and trading and corporate access to help understand market activity over the period of January 2022 to December 2023.
This period has been challenging. Volatile market conditions and slower growth have put pressure on the whole industry. But sell side firms continue to innovate to deliver value to clients and drive engagement through improved targeting and matching of content and services, higher touch interactions and automation. There are ways to succeed, even when the environment is difficult.
Quality research content remains important in challenging conditions, and we’ve seen both research production increase by 11.3% and engagement increase by 2% over the last two years. Firms are also adapting delivery methods to improve discovery and integration into investment decisions. In particular, advisory firms are moving towards a more targeted approach to research content over mass email distribution and are increasingly pushing engagement to channels such as third-party aggregators and internal research portals. This matches up with a broader trend towards highly-personalised content as buy side expectations evolve. Engagement is up overall at 7.57%, but engagement in Q4 2023 is lower than the same period in 2022.
What makes great research content? Specific characteristics emerge which drive engagement. The most positively correlated factors are degree of language variation and report length, whereas sentiment and calls to action (CTAs) have little correlation to research engagement.
Interaction volumes over 2023 reversed the upward trend of 2022, reflecting pressure on research budgets and margin pressure at sell side firms. In response to looser regulation and tighter budgets, 2023 data shows that advisory firms are spreading interactions broader, with a 17.5% increase in the number of accounts managed and deeper, with a 20.6% increase in the number of contacts managed, reducing the relative number of interactions per account and contact. Sales functions are focusing on more high-touch, high-value activities.
The last two years have seen a slow-down within corporate access activity compared to the pandemic period. With the increase in face to face events, corporate access activity has shifted away from deal and non-deal roadshow activities, which are down 9.6% to conferences, reverse roadshows and field trips. Similar to sales, lower event volumes have resulted in a shift away from calls towards higher touch, higher value meetings, reflecting an industry shift towards doing more with less. There were encouraging signs towards the end of 2023, with meeting bookings increasing above 2022 volumes.
Market and wider geopolitical conditions have been tough over the past few years, but there are ways for advisory firms to achieve growth even in environments like this. To get the full picture of what’s been happening across research, sales and trading and corporate access, download the full report now.