# Capital markets interactions, valuation, and broker votes A fundamental guide to how the sell side generates revenue through research and events Insights In this article, we’ll explore how research and events contribute to sell side revenue alongside other key activities, and how technology can help quantify and optimise these efforts. ### Tying research and corporate access to revenue Three concepts are key to understanding how the sell side generates revenue: interactions, research valuation, and the broker vote. Following are definitions of each concept which we will expand on in subsequent sections. **Interactions** are services and touchpoints that sell side firms provide their buy side clients – every time a sell side firm and each one of their customers are in contact, an interaction is generated. Interactions can come from sell side research, corporate access, and sales teams. Types of interactions include analyst meetings, roadshows, and expert meetings. **Research valuation** is a process applied to research and other services provided by sell side firms to determine how these services contribute to their investment process. A mix of qualitative and quantitative data is used. These interactions are then valued by the buy side. The goal is to place a monetary value on each interaction type to then appropriately pay each broker. **The broker vote** is a process used by the buy side to assess the value of soft dollar services from sell side firms and allocate trading commissions accordingly. ### How sell side firms generate revenue It’s important to note that in addition to research and events, the sell side generates revenue in several ways: - **Commissions and fees on trading**: sell side firms execute trades for buy side clients and charge a commission or fee per transaction. - **Underwriting, or investment banking fees**: fees are earned by underwriting new security issuances, such as IPOs, bonds, etc., for companies. - **Market making and bid-ask spreads**: sell side firms buy and sell securities, profiting from the difference between the buying and selling price. High-frequency and algorithmic trading are major revenue sources for some firms. - **Prime brokerage services:** the buy side uses sell side firms for margin financing, securities lending and trade execution, generating revenue through fees and interest on borrowed funds. - **Mergers and acquisitions (M&A) advisory:** investment banks advise on mergers, acquisitions, divestitures, and restructurings and charge fees on these services. - **Structured products and derivatives**: sell side firms design and sell structured financial products, options, swaps, and other derivatives to institutions, and the revenue comes from structuring fees, trading profits, and hedging services. - **Research and soft dollar arrangements**: equity research is often a cost centre, but firms monetise it through bundled trading commissions or subscription-based research services. Some firms charge directly for research due to MiFID II regulations. - **Securities lending and repo transactions**: investment banks lend securities to hedge funds, earning fees. In the context of repurchase agreements, they also sell securities with an agreement to buy them back later at a higher price. - **Proprietary trading**: some firms trade for their own accounts, particularly in commodities and FX. ### Research and soft dollar arrangements As we’ve seen, research and corporate access departments are seen as cost centres, but they also drive revenue through commission-based soft dollars instead of direct payments. This approach to investment research payment allows buy side firms to access research without directly impacting their operating budget. **Here’s how soft dollar arrangements work:** 1. A buy side firm executes a trade through a sell side brokerage, and the brokerage charges a commission. This commission includes both execution costs (the actual cost of the trade) and soft dollars (payment for research and other services). 2. The research and other services are then delivered. Brokers provide proprietary equity research, economic analysis, market data, investor conferences, and software tools. The buy side firm benefits from these services without paying directly for them. **Soft dollar services include:** - Equity and fixed income research reports - Bloomberg terminals and other market data tools - Quantitative and trading analytics software - Access to sell-side analyst calls and investment conferences - Corporate access, or meetings with company executives ## Types of broker interactions Corporate access, research and sales all provide services to their buy side clients that are defined as interactions. Interactions provide insights, build relationships, and generate revenue. Sales interactions are easy to attribute to revenue, as sales is seen as a clear revenue driver. Corporate access and research interactions are less direct in the ways they generate revenue, as the sell side incurs costs to produce these interaction types. ### Investment research interactions Sell side investment research is the process of analysing financial instruments, industries, and markets to provide insights to institutional investors so they can make informed investment decisions. Research can cover equities, fixed income, commodities, alternative investments, economic analysis, quantitative research, and technical analysis. Research interactions can be one-to-one or one-to-many. One-to-one, personalised interactions are often viewed by the buy side as more valuable than one-to-many. Here is a breakdown of research interaction types: #### Research reports and notes Sell side research analysts publish written research that is then delivered to and consumed by buy side clients. This type of research can include: - **Company-specific reports,** such as earnings previews, earnings reviews, stock recommendations, and financial models - **Sector and thematic reports** that highlight industry trends and long-term investment themes - **Morning notes** that serve as daily updates and market commentary on market movements and key news - **Macroeconomic reports,** such as economic forecasts and analysis on central bank policy - **Event-driven research,** such as mergers, regulatory changes, and geopolitical impacts #### Analyst calls and webinars Sell side research analysts are true experts in their space. For example, equity research analysts on the sell side typically cover 10-15 stocks, and they know those companies in and out. Their equity research reports are informed by comprehensive financial models with deep historical data and forecasts on future performance. This depth and breadth of knowledge is what makes their insight so valuable to buy side analysts, who typically cover 50+ stocks. With that many stocks in play, there is no way for a buy side analyst to be as knowledgeable about a particular company as a sell side analyst, which is why sell side research and financial models are an integral part of the buy side investment research process. Analyst calls can take a number of forms. Some typical ones include **scheduled analyst calls** and **pre-market** or **intraday updates**, where analysts discuss recent research and market trends with their clients. Other interaction types under the analyst call umbrella include **thematic webinars** featuring industry experts and **post-earnings conference calls** to dissect financial results and company guidance. #### Meetings and relationship management Similar to analyst calls are ad-hoc discussions between analysts and portfolio managers, including in-person meetings. This interaction type allows the buy side to access timely insights from sell side experts to help them make informed investment decisions in a dynamic fashion. Another interaction type includes messaging and chat-based research updates via a platform like Bloomberg or Symphony. This is yet another channel which helps the buy side incorporate expert insights from sell side analysts into investment workflows quickly and conveniently. Monitoring these more ad-hoc interaction types requires robust processes supported by the right technology tools to ensure the sell side can realise the value of the expertise they provide, regardless of interaction type or channel, including interactions taking place through Bloomberg Chat. #### Custom research and bespoke analysis The sell side will offer bespoke research services in addition to their standard published reports. These are tailored to the needs, interests and specialities of particular clients. These types of custom offerings include: - Deep-dive financial modeling for specific investment theses - Scenario analysis on M&A or geopolitical risks - Alternative data driven insights Note that as this type of research interaction is tailored to a specific client and does not have the broader potential audience of other research products, it is typically paid for in hard dollars. #### AI and digital research platforms More and more sell side firms are offering self-service access to research via research portals and dashboards for reports, models, and analyst insights on demand. Lastly, corporate access also falls under research interactions, but because there are a variety of types of corporate access interactions, we will cover that in the next section. ### Corporate access interactions Corporate access is typically a subdivision within the sell side research department. This team is responsible for arranging meetings for institutional investors and corporate executives. Sell side firms facilitate these interactions to help investors gain insights into a company’s business, strategy, and future outlook, often providing a significant information edge. These types of interactions include: - **Non-deal roadshows**, where companies meet with investors without raising capital - **Deal roadshows**, where companies meet with investors to raise capital - **Investor conferences**, which are organized events featuring multiple companies. These are typically sector-specific but can be general investor conferences as well, and feature presentations, panel discussions, and breakout sessions. Corporates present their financial outlook, industry positioning, and growth strategy - **Private investor meetings** with management, which can be 1:1 or small groups - **Expert calls** with industry specialists for deep dives. Experts can include former executives, consultants, regulators, or suppliers. These events help investors understand competitive dynamics, regulatory risks, and technological advancements - **Site visits and field trips**, where investors visit company headquarters, factories, R&D centres, or stores for a firsthand look at operations. This type of interaction helps investors validate management claims and industry positioning. ## Tracking interactions Both the buy side and sell side track interactions, and this tracking works as a kind of checks and balances system to ensure both parties have accurate reporting. Sell side brokers track interactions to verify that they are being paid fairly, particularly through soft dollars. Buy side consumers of research are interested in finding out which research providers and types are most valuable to them. Tracking interactions can be labor intensive without a software solution to automate logging. In addition, it’s important to have analytical capabilities to measure ROI based on the interactions data collected. With software solutions now available, the quality of interactions data has improved drastically, boosting its usefulness and building trust between research providers and their clients. This data provides important context on qualitative feedback from the buy side. Being able to access historical interactions data can inform future interactions data – not just on which investors to target with which research reports and events, but to inform the sell side firm’s offering. In Singletrack’s Q2 2025 benchmark report, trends in interactions data showed the following: - Research distributions are at an all-time high since we first began publishing the Quarterly Benchmark Report - Sales teams are increasing their coverage with the highest number of accounts managed since the Quarterly Benchmark Report began - Corporate access professionals are trying to deliver both high-quality, small-scale interactions and larger events which boost access ## Valuing research and corporate access Meticulously tracking interactions is one piece of the puzzle, but buy side clients are also trying to value services provided based on the value they provide to the investment process. MiFID II, while still going through changes, pushed buy side firms to increase transparency and communication around valuation processes. Technology continues to be a critical component for combining qualitative and quantitative feedback to produce an effective valuation process. Ultimately, investors are trying to link research to alpha generation and pay accordingly based on that – this is exceedingly difficult. This process gets a little murky and can lack transparency, but some buy side firms implement a rate card for interactions, which helps them properly budget their commission wallet. The buy side may track their own consumption data – which historically was only tracked by the sell side. By tracking consumption, the buy side can see what type of interactions they are engaging in and at what volume, and assign a value for each interaction type. Valuation is determined by the perceived value of each interaction to the investment process. Then a rate card is used to place a monetary value on each interaction type and the commission wallet is divided amongst the brokers. ## Breaking down the broker vote The broker vote (broker evaluation, provider evaluation) is a process used by the buy side to assess the value of soft dollar services from sell-side firms and allocate trading commissions accordingly. If consumption data and a rate card is used as described above, quantitative metrics inform the broker vote in addition to qualitative data around the quality of research, trading capabilities, access to liquidity, and other services. Investment teams then take part in a vote which helps determine which research providers deliver the most value to their investment process. Based on the broker vote results, the commission wallet is allocated to each research provider. Sometimes the results of the vote are shared with the brokers, and the brokers will use this data to reward research analysts for their performance – a big incentive for research analysts to be high-performers. Based on these three concepts, sell side research and corporate access teams can more tangibly demonstrate how they are contributing to the firm’s revenue and profits to mitigate the fact that they are seen as cost centers. These teams can further increase their contribution to revenue through collaboration. ## The case for driving revenue through research We’ve seen a trend of the buy side reducing the need for and ability to support a long list of providers, as commission wallets shrink. Coupled with the fact that the sell side has cut research advisory services to maximise profits, sell side institutions need more than ever to stand out through top-tier products and services and a data-driven approach. To hear more about this topic, check out our recent Singletrack Academy webinar, all about driving ROI in investment research.