| Ref: 04-99 21 June 1999 STOCKBROKERS’ FUTURE IN EUROPE RELIES ON THEIR ABILITY TO EXTEND CLIENT SERVICES Private client stockbrokers have previously prioritised corporate branding in their strategy for pan-European share-dealing, but value adding services will determine their survival over the next 12 months, according to Eric Dickinson, Business Development Director at TCA Synergo. Speaking at an industry seminar on 'Europe and the Private Client Stockbroker', Eric Dickinson commented: "E-commerce, for example, is developing at an exponential rate. Simply being able to deal over the Internet will soon become commoditised. Clients will start to base their choice of stockbroker on their ability to provide research, additional pricing information, on-line valuation and performance monitoring - and even perhaps other new stockbroking services!" Eric Dickinson went on to predict that ‘value adding’ will be a constant theme throughout 2000 and 2001, bringing with it an era of 'pick'n'mix' services. The lower cost ‘internet infrastructure’ has attracted non-traditional market entrants to the financial sector. There is no reason why stockbrokers cannot also extend their service offerings into new areas such as pension provision, insurance and mortgages to reach a wider client base. In addition, state-funded welfare provision is set to be overwhelmed by an ageing society, and an equity culture will become increasingly dominant, heralding unprecedented opportunities and pitfalls for private client stockbrokers. Inevitably, investors will become more demanding, using performance monitoring as a guide to who can deliver the best results, and in their desire to gain a balanced portfolio through a spread of international, sector-based stocks and shares. This will simultaneously initiate changes in the distribution of stocks and shares and increase trading volumes, which will force a more urgent need for automation, so that stockbrokers can remain contenders in the marketplace. Eric Dickinson concluded: "As geographical borders blur and a wider range of stocks and services become available, competition will increase and so will the need for automation. It is estimated that approximately two hundred Internet brokers are poised as market entrants on the back of technological developments. To the question of whether Europe represents an opportunity or a threat, the only answer is that a combination of value adding services, and the ability to respond quickly to a fast-moving market, with adequate automation as support, will provide the key competitive advantage. Nevertheless, in the face of intensifying market competition, they will not guarantee success." - END - |