The survey of 80 European investment managers found that 50% have reduced or suspended business with brokers because of poor operational performance in the last 12 months. A 2004 study by Z/Yen found that 55% of investment managers in Europe had struck off or suspended a broker for poor operational performance.

CSFB was ranked best 2005 operations bank for equities, with the highest overall score for transaction processing and client service. ABN Amro came out top for fixed income.

Around 78% of investment managers now say that brokers' operation performance has an influence in business allocation. Of these, 48% say that good or excellent performance will increase commissions. Half of investment managers also regularly carry out ranking of brokers' operational performance.

Z/Yen says good operational performance is also rewarded and is now a significant factor in the "broker vote" - the process by which asset managers allocate business to brokers. The study shows that operational performance now comprises up to 25% (with an average of 14%) of the broker vote.

Jeremy Smith, director of financial services at Z/Yen, says: "Investment Managers are very aware of operational service level deficiencies from the brokers and are increasingly channelling business to those who provide high levels of STP and value-added services. Tolerance of poor performance has disappeared."

This year's survey also found significant growth in outsourcing of investment managers' operations, with 15 of the 80 respondents now outsourcing all or part of their operations, compared with nine in 2004.

Investment managers have also invested in technology, with over 50% now using Oasys and Alert. A further 25% are looking to implement FIX over the next 12 to 24 months.