For decades, fixed income investments like treasuries and bonds have been key components in many portfolios, offering stability, income, and diversification. After the 2008 financial crisis, though, when the Federal Reserve dropped interest rates to near zero, low yields made fixed income investments less attractive, despite being essential for managing risk. During this time, equities—with their higher return potential and higher risk—often garnered more attention.
Today, with yields at more competitive levels, fixed income is more appealing, offering both risk management and the potential for stronger returns. As advisors reconsider fixed income strategies for their clients, though, they’re hampered by the same outdated systems. The industry needs modern tools.
A Massive Market Lagging in Innovation
The global fixed income market is worth $130 trillion, with $55-60 trillion in the U.S. alone, yet innovation in bond trading lags other areas of finance. For many advisors, trading bonds remains cumbersome. Challenges include:
- Trade delays: Bond trades can take anywhere from minutes to days.
- Scaling difficulties: Trading large numbers of bonds remains complex and time-consuming.
- Fragmented data: The data needed to find opportunities is scattered and costly to access.
Outdated systems lead to inefficiency, slow execution time, and a lack of integration and transparency. All of this makes it difficult to manage fixed income investments at scale. Institutions benefit from advanced tools, yet individual investors and RIAs often face more friction with fixed income assets than they do in equity markets.
The Hidden Costs of the Status Quo
Many advisors, frustrated by the complexity of bond trading, have turned to bond ETFs as a simpler solution. While convenient, bond ETFs come with trade-offs: less customization, less control over the underlying holdings, and fewer opportunities for tax optimization compared to individual bonds. Additionally, unlike individual bonds, bond ETFs don’t offer predictable cash flows, as distributions can vary depending on the performance of the underlying assets.
The Solution: A Smarter Way to Trade Fixed Income
Altruist’s new, fully integrated fixed income trading platform simplifies and streamlines bond trading for advisors. Built in partnership with Moment, a leader in digital bond trading technology, the platform aggregates liquidity from all major U.S. fixed income venues. Advisors can now find bonds, view real-time analytics, and execute trades with a single click, bringing greater efficiency and control to fixed income management.
Key benefits include:
- Predictable Cash Flows: When individual bonds are held to maturity, clients can benefit from more consistent income.
- Tailored Portfolios: Advisors can customize portfolios to meet clients' specific risk tolerances, cash flow needs, and goals.
- Tax Optimization: Especially in municipal bonds, individual securities might provide tax benefits not available with ETFs.
Our competitive pricing helps make trading more cost-effective. Treasuries have no transaction fees, while CDs, corporate bonds, and agency bonds cost just $1 per bond (per $1,000 face value). Municipal bonds are $1 per bond (per $5,000 face value). With a $10 minimum and $200 maximum, we’re removing the traditional barriers to trading individual bonds.
Better Connectivity, Better Pricing
By connecting to multiple liquidity sources, advisors can likely reduce the average price per trade, compared to trading through a single venue. Moment’s technology ensures that advisors always access some of the best prices available by aggregating liquidity across major U.S. fixed income venues.
For example, when a bond is priced more competitively through a dealer-run rather than a central order book, Moment’s platform automatically submits a request for a quote (RFQ) and executes the trade at the best available price. This smart routing helps maximize value for clients.
The Future of Fixed Income for RIAs
The future of fixed income trading is here—simpler, faster, and more flexible. Altruist’s new platform allows advisors to trade individual bonds as easily as equities. We’re breaking down the barriers that have long made fixed income trading cumbersome for RIAs.
Whether your strategy leans on the convenience of bond ETFs or the customization of individual securities, Altruist gives advisors the tools to access the bond market with more clarity and efficiency.
Ready to upgrade to a modern, fully digital fixed income trading experience? Learn more here.
