Investors willing to pay premium for top research and order-flow info.
Brokers are still important in the stock market, especially for institutional investors. A study of 300 million trades shows that investors are willing to pay more for access to top research and order-flow information. Hedge funds are less sensitive to prices and value order-flow information more. Investors prefer to trade with closer traders and avoid those with a history of misconduct. Some investors can under-report fees by bundling research and execution services.