In its latest annual benchmark study on institutional equity trading, based on interviews with 66 head traders, Tabb warns that market structure continues to be a major buy-side concern. With a third of US equities volume traded off-exchange, 60% of those interviewed say market quality is being affected.

In addition, the buy side's trust in dark venues has been challenged by recent regulatory investigations of several proprietors. Yet, despite two thirds admitting trust issues, traders know to access liquidity they must keep sending order flow into the dark.

Meanwhile, the whole institutional investment landscape is on the cusp of major change, with both buy-side firms and sell-side brokers focused on restructuring, says Tabb. Commission budgets have been falling year after year, yet investment managers demand the same level of services from their brokers and that "dynamic is unsustainable", says Tabb, leaving many sell-side firms at "breaking point".

Meanwhile, while the buy-side recognises the need of brokers to adapt, institutional investors are worried that consolidation of services may lead to degradation in quality and the loss of anonymity between the high touch and electronic desk. Nearly seven out of 10 believe maintaining anonymity between high- and low-touch trading is vital.

Cheyenne Morgan, research analyst, Tabb, says: "The most-valued features such as anonymity and expertise stand to be compromised as the sell side will be forced to explore new ways to do more with less. Maintaining client trust while consolidating multiple roles into a single-touch point will no doubt prove challenging but is a must in today's environment."