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Rating:AllianceBernstein Watches Unbundling Trend From The Sidelines Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, March 31, 2006

AllianceBernstein Watches Unbundling Trend From The Sidelines

by: Armie Margaret Lee

AllianceBernstein Holding prefers to wear the hat of observer, instead of participant, in the unbundling trend -- for the time being, that is.

The New York-based firm is keeping an eye on the trend, which involves the splitting of research from execution services, and is likely to give its take on the issue during the next year or two, according to a Dow Jones report.

"There are a lot of things happening, particularly in the sell-side of the business," the report quoted Robert Joseph Jr., senior vice president and chief financial officer, as saying. "We're sort of watching to see how this plays out."

Last October, Fidelity Investments sealed a deal with Lehman Brothers under which the mutual fund giant will purchase stock research using its own cash. Two months later, reached a similar deal with Deustche Bank Securities. Lehman, meanwhile, is reportedly in talks with other fund firms about separating its stock trading and research costs. For its part, Morgan Stanley earlier said that its clients are looking at unbundling.

Like other large brokerage firms, AllianceBernstein offers both trading and research to clients. The firm provides trading services through Sanford C. Bernstein LLC in the US and Sanford C. Bernstein Ltd. overseas.

AllianceBernstein continues to bolster its sell-side research as some of its peers in the industry are scaling back. Because of this, the firm may be able to "do some premium pricing" down the road, Joseph said.

At the close of 2005, the clients for the trading and research business combined numbered 1,200 in the US and 365 in Europe, Australia and Asia. Total revenues for 2005 for the firm's institutional research services unit rose 5.8 percent to $321 million.

AllianceBernstein intends to sell its U.S. and European research in Asia, Joseph said.

In total, the firm employs 361 research analysts globally. It plans to add nine analysts in London. 

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