You may well wonder why there is so much secrecy in the bond market. One answer is that this is the way the market has always functioned, and there is always resistance to change.
But another reason is that many large bond dealers consider pricing information to be one of their main competitive advantages, and they are reluctant to part with this advantage. They are resisting change ferociously.
What is more likely to change, and more rapidly, is the availability of bonds on-line. A number of firms, Schwab and Fidelity among them, have announced plans to expand their bond offerings. But firms you are unlikely to be familiar with may well become major players.
What would need to happen for pricing to become much more competitive?
Software would have to be developed that would allow individual investors to place their orders directly with the dealer listing a bond for sale. Similarly, that software should allow an individual investor who wants to sell bonds to solicit bids directly from dealers. Dealers would then have to compete anonymously on price.
However, it is not just software that must change. It also involves important regulatory issues that exist to protect individual investors.
These issues are complex and unlikely to be resolved instantly. But they point to the need for caution when individual investors buy bonds on-line.
Until pricing information becomes much more transparent, you will still need to shop around and consult a variety of sources to protect yourself on price.
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