How FIX Protocol Enhances Order Routing
It may be overlooked in industry think pieces about ways to streamline your firm’s operations and client experience, but order routing is an essential part of efficient trade execution. It’s also crucial to achieving best execution for your clients — a must for any fiduciary advisor, and a boost to the overall client experience as it impacts performance returns.
FIX connectivity, a lightning-fast protocol that provides real-time data for trades, is the standard for any firm that wants to improve its trading process. But how does FIX protocol actually work, and how can you use FIX in conjunction with the Flyer Trading Network (FTN) to streamline trading processes across your entire organization?
Today, we’re taking a look at how the FIX protocol provides the best data and technology resources available for your advisors, resulting in consistent and accurate trades.
FIX PROTOCOL
Let’s begin with the basics. The “FIX” in FIX connectivity stands for “Financial Information eXchange.” It’s a protocol held in the public domain and regulated by the non-profit FIX Trading Community. With FIX connectivity, investment banks, broker-dealers, custodians and other wealth management firms have access to real-time data and trade order information, such as prices.
Most brokers use FIX as the ultimate source of truth to determine the most accurate prices for their trade processes.
FIX CONNECTIVITY IN ACTION
FIX’s network connectivity can support both speed and volume for your organization. Plus, it provides direct communication from trading systems to brokers and custodians, reducing the potential for hiccups along the way.
In addition to speed capabilities, FIX offers four other key benefits: reliability, order control, algo trading and scalability.
Reliability
ORDER CONTROL
Algo Trading
Scalability
The stability and consistently positive outcomes delivered by FIX are core reasons why it’s at the center of Flyer Trading Network’s suite of wealth management tools.
THE BENEFITS OF TRADE PROCESSING SOLUTIONS
Better trade processing begins with implementing systems that promote efficiency for clients, the overall firm and its advisors. There are two main benefits that make trade processing solutions a worthwhile investment:
REDUCED RISK
Tech that automates parts of the trading process (like the Flyer Trading Network) can help reduce opportunities for compliance errors, specifically through pre-trade checks. Pre-trade checks ensure that a trade stays within a client’s risk profile, while also double-checking that the client’s funds are sufficient to complete the trade.
Happier Clients
While clients may never actually see your trade processing tools, it does directly affect their experience with your organization. Your costs, performance and one-on-one interactions all matter when it comes to how clients feel about your services.
By saving time and energy spent on trade processing, your entire firm gains more time to interact with clients, and create more impactful conversations, while also delivering more consistent results.
POST-TRADE PROCESSING
Another crucial part of the trade process to consider is post-trade processing. To find success during the post-trade process, it’s important to leverage a trade processing network that offers consistency.
For example, if one custodian takes files in a certain format and the next custodian requires a different upload process, the lack of consistency can be time-consuming and leave room for error.
Flyer offers a solution through the Co-pilot OMS as part of our Flyer Trading Network to automatically format your post-trade details or allocations per custodian needs and electronically transmit post-trade notifications to your brokers and custodians.
TRADE ALLOCATION
With Flyer and FIX in your corner, you can also automate trade allocation processes for both full and partial orders to accommodate each individual clients’ needs.
WE RECOGNIZE THE FOUR PRIMARY METHODS OF ALLOCATION DISTRIBUTION:
Pro Rate
This method delivers fair allocation and distribution based on an account’s target allocation quantity.
Random
The random method avoids commission charges on small allocations.
Sequential
Sequential allocates based on target quantity size.
Manual
A manual method allows portfolio managers to allocate everything manually.
The Co-Pilot defaults to average pricing by custodian (rather than pricing by order) to deliver fair and equitable results across your entire book of clients – regardless of what time you submitted an order. But, this is fully configurable to meet your preferred method.
Lastly, Co-Pilot also has built-in omnibus blocking technology to streamline settlement for asset managers and simplify your ability to trade away and execute an order with different broker-dealers.
Flyer Trading Network (FTN)
The big picture is clear: You need next-gen technology that answers both client and firm needs, fueled by the industry-standard FIX platform.
With over a decade of experience serving asset managers, broker dealers and exchanges, Flyer has earned a reputation for delivering the best SaaS-based enterprise trading software available.
The Flyer Trading Network (FTN) uses FIX connectivity in a broker-neutral trading software to help enhance market visibility, accelerate onboarding, manage risk and facilitate best execution across all your trades.
FTN’S SUITE OF TOOLS DELIVERS:
- Conformance testing
- Data feed handlers
- Smart order routing
- Risk checks
- And much more
Our monitoring system gives you operational alerts for both infrastructure and messaging, as well as a simple view into FIX messages, historical archives and reporting.
