16 August 2017
visit www.avoka.com

"Optimal brokerage" model to win out says TowerGroup

16 November 2000  |  2398 views  |  0 "Optimal brokerage" model to win out says TowerGroup

Boston-based TowerGroup is predicting a business model shift in retail brokerage as firms increasingly combine Internet discount and full-service offerings.

The research, conducted by analyst Ed Kountz, expects North American retail securities IT spending to reach $6.91 billion in 2001, a 22% annual increase, with approximately one third of this spending figure going to Internet-related front-end projects. A growing percentage of spending will occur among full-service and blended full-service/discount brokers, says Kountz, now that the limitations of Internet-only brokerage are becoming apparent.

This increase in spending reflects the need for multi-channel delivery, states the report, and corresponds with the rise of a new business model, dubbed "optimal brokerage" by TowerGroup. The new model combines Internet discount and traditional full-service brokerage elements, such as multi-channel delivery; standard Internet trading capability; additional products, tools, and services; and enhanced investor advice. The push toward optimal brokerage offerings is giving large retail brokers an incentive to expand the financial tools, product offerings and cross-channel connectivity they provide on tap, states the research.

Dennis Ceru, newly appointed research director of the online brokerage & investing service at TowerGroup, notes that the original concept of Internet brokerage - a self-directed investor making his or her own trades and decisions - is quickly shifting.

He predicts: "IT spending in 2001 by retail brokerages will be highest in areas like portfolio management, relationship management and decision support-areas where firms feel they can provide front-end value to their brokers, customers or both."

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Citi opens new online brokerage

Citi opens new online brokerage

13 November 2000  |  2484 views  |  0 comments
Securities industry IT spending to soar

Securities industry IT spending to soar

06 November 2000  |  2008 views  |  0 comments
Rising IT costs will force capital markets firms to take ASP route

Rising IT costs will force capital markets firms to take ASP route

02 November 2000  |  2202 views  |  0 comments
Schwab Europe cuts IT spending - FT

Schwab Europe cuts IT spending - FT

02 November 2000  |  2767 views  |  0 comments

Related blogs

Create a blog about this story (membership required)
visit www.dorsum.euvisit www.worldpaymentsreport.comdownload the paper now

Top topics

Most viewed Most shared
hands typing furiouslyBI and Analytics - A New Perspective
10959 views 0 | 2 tweets | 12 linkedin
Coinbase raises $100mCoinbase raises $100m
10085 views comments | 14 tweets | 14 linkedin
DBS Bank launches online car selling marketplaceDBS Bank launches online car selling marke...
9428 views comments | 13 tweets | 11 linkedin
China preps central clearing house for mobile payments providersChina preps central clearing house for mob...
9189 views comments | 8 tweets | 15 linkedin
HSBC automates documentary trade processing with IBMHSBC automates documentary trade processin...
8292 views comments | 6 tweets | 21 linkedin

Featured job

Competitive base and bonus, plus benefits
London, UK

Find your next job