Please describe your role and responsibilities within Insight Investment today.
My role at Insight Investment has changed dramatically over the past 3-4years. I’m part of an FX Execution team which trades all currency requirements for Insight Investment. Our stakeholders are Portfolio Managers (discretionary and non-discretionary) and quantitative model strategies (Active and Passive). Our responsibilities incorporate all aspects of Best Execution as well as trying to maximise any potential execution alpha. We use our TCA providers and own execution analysis to better inform our decision making process at the point of trade execution. We also try to collaborate with the stakeholders to add value where we can. We believe our tools for execution are market leading. I am also the 3rd man for the equity trading team where we are also collaborating on building pre-trade execution tools.
How do you see your dedicated FX trading function contributing to the overall investment process and client satisfaction for Insight Investment?
We deliver a market leading execution service that minimises market impact, by only interacting with liquidity providers who behave in a way which does not leak information.
We believe that we access the market for our clients at a minimal cost. We use our execution expertise as a feedback to the pre-trade decision to compliment the overall investment process.
What is the rationale for FX traders to trade with FX trading algorithms, are they robust and do they consistently deliver better results?
FX trading algorithms deliver quick, transparent and auditable execution in the market place. We believe that we satisfy our Best Execution regulatory requirements by utilising algorithms. Algorithms allow quick access to the market with transparent fill data. Voice trading can NOT deliver the same degree of auditable transparency. We have an algorithmic trading policy which delivers evidential results, which allow us to prove that our method of execution is robust. The policy allows us to challenge our executions to ensure that the results we are delivering are consistently good.
How do you foresee the trading technology landscape, with a few incumbent brands, shifting in the coming years? What will be the focus areas?
As has been the case for a few years now, the focus area will remain the availability and quality of execution data. As an industry we need to improve our access to execution data and make changes to allow the data to be standardised. We need to be able expand the data collection universe and will lean on vendors/brands who are capable of delivering analytics on this data. The emergence of Artificial Intelligence and Machine Learning to satisfy these analytics is currently unproven and I would expect that this will be an area of focus in helping to deliver useful trade analytics.
As trading in general moves towards more automation, in which ways do you think this will affect a FX traders’ role?
Automated trading via Execution Management Systems will become the norm and I think the FX trader’s role will be one akin to flying a plane on autopilot. The trader will be overseeing the whole investment execution process and will try to add value holistically. Automation will allow easier capture of exceptions and the trader will focus more of his time in managing this and delivering improvements to the investment process to deliver added value.
As we already know, much of the FX trading in the industry is uncleared OTC derivatives operating in an opaque market today. What developments do you anticipate or think is needed in the next years?
A continuation of the developments in liquidity provider execution analysis.
I would like to see the industry improve its transparency around rejection codes, type of liquidity, cross currency liquidity and last look. Insight is a supporter of the FX Global Code and I would like to see greater uptake from our peers on the buyside in signing it. I think this would enable the industry to move forward as a group and allow us to formalise our achievements and targets for a better FX market place.
As electronic liquidity providers are gaining the buy side’s trust and momentum across the industry, how do you see the FX counterparty list evolving over the next years?
I think that a reduced core of electronic liquidity providers will exist in the future specialising in particular currencies. The best liquidity providers will be white labelled for banks or other liquidity providers, enabling the utilisation of bank balance sheets for non-PB relationships. The PB model may grow to facilitate this move towards a core group of liquidity providers.
How long have you been in the FX trading industry? How did you come to have a career within FX trading?
I have been trading for 23 years across a broad spectrum of financial products. I was formerly at Cargill where I traded agricultural commodities, and laterally FX and Interest Rate products. I then joined Pareto Partners where I traded FX and multi-strategy products. Pareto merged subsequently with Insight Investment where I now specialise in algorithmic trading (and TCA) for FX and Equity products. As a school leaver I worked for Rolls Royce as an engineer making steam turbines and all the ancillary equipment. When I was studying for my degree (as a sponsored student) it became very clear that the industry was struggling in the UK. It was then I decided to look for a new career. I decided on commodity trading as it complimented my skills as an engineer and was employed, during an extended interview with Cargill, following a summer internship. (I hold a BEng in Civil and environmental engineering.)
What do you think are the most important qualities to be a FX trader?
Ask questions – no question should be ignored.
Being personable – we face a lot of different people with many differing roles/objectives. Understanding what people need/want from you is of paramount importance to being a good trader.
Have an appropriate analytical mind - you need to be able to focus on the day to day attention to detail, and also be able to look at the bigger picture to plan for the future.
Do you have any interests outside of work to help relieve the day to day stresses of trading? Are you able to achieve a good work life balance?
Yes, too many to mention! Am head coach of a junior rugby team which is a great distraction. My wife also coaches and my children (Max aged 9 and Lil-Maya aged 5) both play. The family also have season tickets to the Harlequins who we love to watch. Rugby is a theme at home! I also love all sports (unfortunately a Newcastle United fan) and am particularly active in cycling. I commute on a bicycle and get out most weekends with some friends for an early ride out into the countryside. The family enjoy holidaying in Cornwall with a focus on surfing, coasteering, kayaking and paddle boarding. Am also an active member of the Scottish Malt Whisky Society. All these interests keep my feet firmly on the ground and help to put things that are important into perspective, which is very important after a stressful day.