Article Feb 02, 2026

2026 Outlook: The Future of Trading

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Trading is undergoing a seismic shift. What was once a relationship-driven, manual process is now increasingly automated and data-driven. Faced with fee compression, rising regulatory requirements, and technological advances, firms are rethinking how they trade.

Automation, analytics, and selective outsourcing can unlock meaningful competitive advantages. Technical expertise and data analysis are now more valuable than broker relationships, while outsourced trading providers offer access, scale, and execution expertise at a lower cost.

Success today depends on embracing change.

The EMS: NextGen Automation and Intelligence

Traders have used an Execution Management System (EMS) for surgical order slicing and wave management for over a decade, but today’s EMS continues to evolve, now offering market data, multi-asset support, and pre-trade tools to enhance decision-making.

Today’s EMS comes equipped with better tools that allow traders to focus their attention on more complex, high-touch orders. Rule-builders have become a standard feature across the market, helping to automate bespoke workflows, while smart order routing can route trades based on market signals, or other advanced criteria.

And all of this is a welcome change, because as we have seen in past Cutter Research studies related to trade execution, our members struggle the most with manually intensive workflows.

But automation is not just a trend; it is key to the future of trading. By combining technology with human oversight, firms can achieve faster execution, better compliance, and improved risk management.

Automation does not eliminate the need for human traders; it redefines their role. In fact, it elevates the trader’s function to one of oversight and strategy rather than routine execution.

In practice, trading is so much more. It has become a critical component of the portfolio construction process by providing insight into expected implementation cost and strategy.

The next evolutionary phase of the EMS will continue to reduce manual order handling in other markets, such as fixed income. This has already begun, and we predict that innovation will come to other less liquid and niche areas of coverage. The EMS will support both institutional-grade execution management for traditional asset classes, but also provide access to DeFi protocols, with workflow and analytics to support digital asset trading.

This next phase is already happening, and more firms will look for new trading solutions to improve their process.

Outsourced Trading: Execution at Scale

Asset managers of all sizes now employ outsourced trading. Beyond cost savings, outsourced trading offers improved execution, advanced technology, and regulatory support — especially valuable for managers without scale. Outsourcing suits firms with limited resources or cost pressures, providing instant access to high-quality trading, compliance, and tech solutions.

Outsourced trading providers are managing large books of business and maintain trading relationships with hundreds of broker-dealers and electronic liquidity sources. With their large volume, they can obtain lower per-trade commissions and provide smaller firms with access to more trading partners.

While firms may prefer in-house trading to align trade execution closely with investment goals, a hybrid model is also gaining traction where firms retain complex or high-touch trading in-house while outsourcing low-touch flows, asset classes, or trading on a regional basis.

The ideal setup is not choosing one over the other (in-house versus outsourcing), it’s about finding the right combination to meet your firm’s objectives.

The Future Has Arrived

Market data and trade analytics are now widely accessible, shifting traders’ roles from relying on exclusive information to using quantitative tools for execution, risk management, and analysis. As a result, it is essential that firms have the right tools for the job.

More investment managers today are focused on best-in-class trading technology and partners that can help them scale. They want a platform built for the future so that as trading requirements become more advanced, the platform they use is ready. And they need a vendor that not only understands their business today, but how their business will change tomorrow.

In 2026, Cutter Research will cover the Future of Trading, including the EMS vendor landscape. If you’re interested in this topic or have insights to share, let’s talk.

Reach out at [email protected]

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