Welcome to the latest episode of At the Forefront: Fintech Conversations!
To learn more and listen to our previous episodes, click here.
In this episode, Forefront Senior Consultant Michael Kingsley sits down with David Choate and Chris Hurley of CAPIS, a compliance-driven institutional broker that has built its business exclusively on trade execution and commission management services.
Michael, David and Chris begin their discussion with an overview of CAPIS’ unique outsourced trading solution, which presents particularly powerful benefits for registered investment advisors (RIAs). From $20 billion institutions to smaller wealth managers, CAPIS can service any firm in this category looking to deliver trading excellence and quality to its clients.
David and Chris discuss how many RIAs have already outsourced functions such as compliance, IT and even middle- and back-office operations, making outsourced trading a natural progression. Challenges such as employee attrition, potential loss of assets and contingency planning have further accelerated the trend.
Next, David and Chris explain how CAPIS’ outsourced trading offering caters to RIAs’ individual needs and unpack the factors that go into developing a trading strategy. These include total AUM, the nature and quantity of distribution strategies and any liquidity restraints at play. They also discuss barriers to efficient trading that tend to be especially pronounced for RIAs, such as outdated technology and offshore overnight trading. CAPIS can work with these firms to upgrade their stack and unlock unprecedented access to the sell side.
David and Chris also discuss how CAPIS prioritizes establishing trust with its clients, particularly when dealing with firms that may hesitate to seemingly relinquish control over their trading. Over the past 45 years, CAPIS has dealt with portfolio managers on both ends of the spectrum, from hands-on managers who request granular information on proposed trades to those who just want an end-of-day recap once the trades have been executed. CAPIS, they state, is dedicated to being an extension of its clients – which means being as high- or low-touch as desired.
Lastly, when speaking about what’s next for CAPIS, David and Chris convey a clear vision. As outsourced trading continues to evolve, the firm will keep building out products that cater specifically to client needs (especially in commission management), further expand its trading functions and remain on the lookout for the best execution venues. Above all, CAPIS plans to keep its finger on the pulse of the markets and prepare for inevitable changes.
See below for a breakdown of what was discussed. Happy listening!
Timestamps:
0:40 – Describe CAPIS – what does your firm do?
1:20 – You have a very specific target audience for your outsourced trading services. Can you tell us who that is and why?
5:45 – What are the top challenges that your RIA clients are facing today?
11:40 – What is your message to firms who are unfamiliar with outsourced trading and concerned that they will be giving away control by working with you?
15:40 – What’s next for CAPIS? Can you give us any insight into your upcoming plans?
