Compliance
Not a duty to get the best price on every trade. A duty to seek favourable terms and to be able to show that you looked.
Best execution is not a duty to get the best price on every trade. It is a duty to seek the most favourable terms reasonably available under the circumstances, and — this is the part firms miss — to review periodically whether you are in fact doing so.
It is a process obligation with an evidence requirement. Which means a firm can obtain excellent execution and still fail, if it cannot show that it looked.
Trades are placed through the custodian, so execution quality is assumed to be the custodian's problem. It is not. The obligation sits with the adviser regardless of who routes the order.
Someone looks at fills occasionally and is satisfied. Nothing is written down. A year later there is no way to demonstrate the review happened, which for evidentiary purposes is close to it not having happened.
Commission is easy to compare and rarely the largest cost. Spread, market impact and timing usually matter more, and none of them appear on a statement. A firm that compares commissions and concludes it is getting good execution has measured the cheapest thing to measure.
| Element | What it should show |
|---|---|
| A measurable benchmark | Fills compared against the best available market price at the time of execution, not against commission schedules. |
| Coverage | All trades, not a sample chosen after the fact. |
| Periodicity | A review that happens on a schedule and is recorded whether or not it found anything. |
| Independence | Data from the custodian or an independent analysis provider carries more weight than a self-report. |
| A conclusion | Someone looked, decided, and signed. A dataset without a conclusion is not a review. |
Execution quality is usually expressed as the share of trades filled at or better than the best available market price. Our own most recent figure is 97.7%, measured by S3 Matching Technologies and reported through Charles Schwab's execution quality report for the third quarter of 2025.
The number matters less than the three things attached to it: who measured it, over what population, and in what period. A figure without those is marketing. Ask any provider quoting one for all three, and treat reluctance as the answer.
This is entirely doable in house, and plenty of firms do it well. What it requires is a written execution policy, a periodic review against something other than commission, a record of that review, and a named person who owns it. If those four exist, the size of your firm is irrelevant.
If they do not exist, the exposure is not that your execution is poor — it probably is not. It is that you have no way to demonstrate otherwise.
Questions this did not answer? Ask them directly — that is what the twenty minutes is for.
Book 20 minutes with Kyle