Friday, November 30, 2007

Strategy - Morgan Stanley - 2006 and before

December 2005

Asset Management Business

Morgan Stanley announced in December 2005 that Owen D. Thomas, 44, Acting President of Morgan Stanley Investment Management since September 2005, has been named President of the division. He will report to Zoe Cruz, Morgan Stanley's Acting President.

John J. Mack, Chairman and Chief Executive Officer of Morgan Stanley, said, "Morgan Stanley is firmly committed to the asset management business, and we have outlined a clear strategy to capitalize on the significant growth opportunities it offers."

Ms. Cruz said, "Since Owen became acting president of asset management in September, he has attracted key talent to the business from inside and outside the Firm, improved the internal partnership culture to better serve our clients, and increased accountability for results. We have seen strong support within the division for Owen's strategic thinking and his ability to implement decisions."

As interim head of investment management during the past three months, Mr. Thomas has initiated a number of changes that mark the beginning of an ongoing initiative to better capitalize on growth opportunities, including those in alternative investments and other new products, as well as growth opportunities outside the U.S. The changes he has made so far include creating a new organizational structure to improve accountability for results, speed decision-making and establish a dedicated alternative investments group. Mr. Thomas also has attracted new talent from inside and outside the Firm, seeded new investment products in alternatives and other areas, and moved functions such as product development closer to investors.

Mr. Thomas will be Chairman of Morgan Stanley Real Estate. In that role, Mr. Thomas will not be involved in the day-to-day management of the real estate business. He will be available to work with select clients and investors to the extent permitted by his primary role as President of Asset Management.

Morgan Stanley Investment Management

Morgan Stanley Investment Management, with $428 billion in assets under management and more than 400 investment professionals around the world, is one of the 20 largest businesses in the highly fragmented global investment management industry. The division, which serves both institutional and individual clients, contributed more than 12 percent of Morgan Stanley's profit before taxes in 2004, up from more than 8 percent in 2003.

The division has three distinct sets of clients:

--Institutional clients, including 401(k)/defined contribution plans, endowments, foundations, pension funds, corporations, governments, and high-net-worth individuals;

--Individual investors who own Morgan Stanley funds managed by Morgan Stanley Investment Advisors; and

--Investors who make investments through other brokerage firms, banks and financial planners via Van Kampen Investments, a wholly owned subsidiary.

As of August 31, 2005, assets under management or supervision included $227 billion in institutional assets and $201 billion in retail assets.

Morgan Stanley is a global financial services firm and a market leader in securities, investment management, and credit services. With more than 600 offices in 28 countries, Morgan Stanley connects people, ideas and capital to help clients achieve their financial aspirations.


Strategy - Morgan Stanley - 2007 onwards

Economic Times, 12 March 2007, Page 2007

Morgan Stanley to reestablish Private Equity Business

Morgan shed its private equity activities in September 2004 after a number of leveraged buyout shops complained that bankers were crowding in on deals. Morgan, led then by Purcell, spun off Morgan Stanley Capital Partners as Metal Mark Capital. that proved to an ill-timed move as LBO activity exploded and rivals especially goldman Sachs reaped billions in profit.

John Mack, wh took over as CEO in June 2005, want MS to take more principal risks, including a return to PE business. Morgan created a principal investment arm with up to $2.5 billion to spend.

Morgan plans to raise $6billion buyout fund over the course of the year. It will contribute $2B from its funds. Morgan has PE team in Hong Kong. It is expected to close $1 B buyout fund in few weeks. The bank also plans to raise a $2.5 B infrastructure investment fund

Private Equity Funds - Morgan Stanley

Press release

Morgan Stanley Private Equity Names Eric Fry and Michael Hehn Partners

Oct 24 2007 | New York

Morgan Stanley announced today that Michael Hehn and Eric Fry have joined Morgan Stanley as Managing Directors in Morgan Stanley Private Equity, the Firm’s private equity group. Mr. Fry joined from Metalmark in August 2007 based in New York; Mr. Hehn was most recently at Allianz Capital Partners and will join the Firm in December 2007 based in London. They will both be responsible for building the Firm's global private equity business for third-party investors, focusing on leveraged buyouts, corporate divestitures, sponsored recapitalizations, joint ventures and other direct investments in their respective regions.

Mr. Fry brings more than 15 years of private equity experience. He rejoins Morgan Stanley after serving as a Managing Director at Metalmark Capital from 2004 to 2007. Mr. Fry first joined Morgan Stanley in 1989 and Morgan Stanley Capital Partners in 1991; he was named a Managing Director of Morgan Stanley in 2001. Mr. Fry was a member of the investment committees of Morgan Stanley Capital Partners III, Morgan Stanley Capital Partners IV and the Morgan Stanley Global Emerging Markets Fund. He holds a B.S. in Economics, summa cum laude, from The Wharton School of the University of Pennsylvania and an M.B.A. from Harvard Business School.

Mr. Hehn brings a decade of private equity experience. He most recently served as director and a member of the executive committee at Allianz Capital Partners in Munich, Germany, focused on majority investments in Western Europe. He also worked at Merrill Lynch’s Mercury Private Equity (now HgCapital) and The Boston Consulting Group. Mr. Hehn began his career at Andersen Consulting. He received a master of science from Graz University of Technology in Graz, Austria, and an M.B.A from Northwestern University.

“Since determining to reenter the global private equity business, we have assembled a team of top talent from both inside and outside Morgan Stanley,” said Steve Trevor, co-head of both Morgan Stanley Private Equity and the Merchant Banking Division. “Private equity investing is an important business to the Firm and with our strong leadership team in place we will capitalize on the Firm’s unique relationships around the world and utilize the full resources and capabilities of our firm to create industry-leading private equity products and, we believe, above-market returns for the investors we serve.”

Alan Jones, Managing Director and co-head of Morgan Stanley Private Equity commented: “Eric and Michael are excellent additions to our team. They both bring a depth of private equity experience that will prove invaluable as we build a world-class private equity investing platform. We believe that the ongoing globalization and transformation of the economy will produce continued private equity opportunities and that our solid team, coupled with the global Morgan Stanley platform, will be uniquely positioned to capitalize on these opportunities.”

Morgan Stanley Private Equity, part of Morgan Stanley Investment Management’s Merchant Banking Division, makes private equity and equity-related investments on a global basis. Morgan Stanley Private Equity utilizes Morgan Stanley’s vast resources, including the Firm’s global franchise and relationships with leading corporates, management teams and financial sponsors, to source attractive opportunities for its investment funds. Morgan Stanley’s roots in private equity investing date back to 1985 with the Morgan Stanley Capital Partners private equity funds. To date, Morgan Stanley Private Equity and its predecessor funds have invested nearly $6.5 billion of equity across a broad spectrum of industries.

Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 32 countries.

Press Release

Morgan Stanley Raises New Asia-Dedicated Private Equity Fund

Oct 02 2007 | Hong Kong

Morgan Stanley (NYSE:MS) today announced that its Asia private equity group, Morgan Stanley Private Equity Asia (MSPE Asia), has raised aggregate commitments of approximately US$1.5 billion for Morgan Stanley Private Equity Asia III, L.P. (the Asia Fund), the Firm’s third investment vehicle targeting private equity investments in Asia. MSPE Asia, which is part of the Firm’s global private equity group within the Merchant Banking Division, will manage the Fund.

“The new fund will allow clients and investors, as well as the Firm, to capitalize on growth opportunities in Asia through direct investments,” said Hans Schuettler, Chief Executive Officer, Morgan Stanley Asia. “In addition, it reflects our commitment to principal investing in the region, not only in private equity, but also in real estate and other opportunities across the capital structure.”

The investor group is comprised of leading global institutions and high net-worth individuals, as well as Morgan Stanley and its employees.

The Asia Fund will invest in leading businesses located across the region with strong value propositions and has already begun to review investment opportunities. It will have a traditional five-year investment period followed by a five-year harvest period.

“Morgan Stanley has been an active and successful private equity investor in the region since 1993,” said Chin Chou, Chief Executive Officer of MSPE Asia. “We will continue our valueoriented investment strategy, focused not only on opportunities in China, South Korea, Singapore and Taiwan, where we have established track records, but also on other important markets such as Japan, India and Australia.”

Mr. Scott Hahn, Chief Investment Officer of MSPE Asia, added, “We are very pleased with the positive reception to our third and largest fund directed at Asia and believe that market conditions present advantages as the Asia Fund begins to invest capital.”

Stephen Trevor, co-head of both Morgan Stanley’s global private equity business and its Merchant Banking Division, said, “Asia continues to be a primary focus area for the Firm’s merchant banking activities. Morgan Stanley’s franchise in the region has allowed us to access the highest quality, differentiated investment opportunities for our investor clients, which have consistently led to strong investment returns.”

MSPE Asia is one of the leading private equity investors in Asia Pacific. The group has invested in the region for more than 14 years, developing one of the leading investment track records during that time. The group has made a number of investments in businesses throughout Asia, including most recently Belle International, Dongxiang Sports and Shanshui Cement in China, Rotem and Ssangyong Corporation in South Korea, CTCI Corporation in Taiwan, and Asia Capital Reinsurance in Singapore. In addition, it previously invested in Ping An Insurance and Mengniu Dairy in China, eAccess in Japan, HTL International in Singapore and Landmark Investment Trust Company in South Korea.

MSPE Asia is part of Morgan Stanley’s global private equity business within Merchant Banking, a division of Morgan Stanley Investment Management. Merchant Banking sponsors traditional private equity funds, infrastructure-focused funds, and one of the industry’s leading real estate investing platforms globally. By leveraging the Morgan Stanley network and brand to generate ideas, harness relationships and create investment opportunities, Morgan Stanley’s Merchant Banking Division delivers superior returns for its investor clients.

Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 32 countries. For further information about Morgan Stanley, please visit

Press Release
Morgan Stanley Private Equity Hires Gary S. Matthews as Managing Director and Operating Partner

Oct 01 2007 | New York

Morgan Stanley announced today that Gary S. Matthews will join the Firm as a Managing Director and Operating Partner for Morgan Stanley Private Equity, the Firm’s global private equity business. In this role, Mr. Matthews will assist the private equity team in identifying companies for leveraged buyouts, corporate divestitures, sponsored recapitalizations, joint ventures and other direct investments, and will help oversee the management and strategies for those businesses.

Mr. Matthews brings leadership experience across a number of industries. He has led several private equity backed companies and public company business units, including Simmons Bedding Company, Sleep Innovations, Inc., Bristol-Myers Squibb and Derby Cycle Corporation. He also served as Managing Director UK for Diageo/Guinness Limited from 1998 to 1999, as President and CEO of Guinness Import Company from 1996 to 1997 and held senior management positions at PepsiCo and McKinsey & Company. Mr. Matthews began his career at Procter & Gamble. He holds a B.A., cum laude, from Princeton University and an M.B.A. with distinction from Harvard Business School.

“Gary is a proven CEO in both the public and private equity arenas, and has generated top and bottom line growth for more than two decades by transforming internally focused companies into market driven organizations,” said Stephen Trevor, Co-Head of both Morgan Stanley Private Equity and the Firm’s Merchant Banking division. “Operating partners are critical to our strategy of building a world-class private equity franchise and we are pleased to welcome Gary to the team.”

“Gary embodies the traits we look for in an operating partner,” said Alan Jones, Co-Head of Morgan Stanley Private Equity. “He has a successful track record of attracting top-flight management talent and building and motivating teams to create winning cultures with successful business strategies that yield positive financial results.”

Morgan Stanley Private Equity is part of the Merchant Banking division of Morgan Stanley Investment Management. Merchant Banking, led by Stephen Trevor and Jay Mantz, sponsors traditional private equity funds, infrastructure-focused funds and one of the industry-leading real estate investing platforms globally. By leveraging the Morgan Stanley network and brand to generate ideas, harness relationships and create investment opportunities, Morgan Stanley’s Merchant Banking Division aims to deliver superior returns for its investor clients.

Morgan Stanley Investment Management, together with its investment advisory affiliates, has over 800 investment professionals around the world and approximately $577 billion in assets under management or supervision as of August 31, 2007. These entities offer investment management services to a diverse client base, which includes governments, institutions, corporations and individuals.


Press Release

Morgan Stanley Names Brian Magnus as Co-Head of Its Private Equity Business in Europe

Aug 07 2007 | New York

Morgan Stanley announced today a series of senior appointments that bolsters the Firm's momentum in Europe and promotes a new generation of banking leaders into key posts.

As part of the moves, Brian Magnus has been named Co-Head, with Graham Keniston-Cooper, of its Private Equity business in Europe. Magnus is currently Head of UK Investment Banking for Morgan Stanley. Morgan Stanley announced that Keniston-Cooper joined the Firm in July.

The Firm also announced that Simon Smith, currently Deputy Head of European Investment Banking, will take over from Magnus as Head of UK Investment Banking, reporting to Franck Petitgas, Head of International Investment Banking. Additionally, Mark Warham will serve in a new role of Chairman of UK Investment Banking upon his return to Morgan Stanley from the UK’s Takeover Panel, where he has been on secondment as Director General for the past two years. Warham will also report to Petitgas.

Magnus and Keniston-Cooper will work together to build a private equity team based in London and establish Morgan Stanley’s European private equity business for third-party investors. They will focus on direct investments, joint ventures, leveraged buyouts and fund investments in Europe and report to Stephen Trevor and Alan Jones, Global Co-Heads of Morgan Stanley Private Equity.

“Brian is one of Morgan Stanley’s most experienced bankers in Europe with deep knowledge of our platform,” said Trevor. “We believe that his experience will be the perfect complement to Graham’s long track record of private equity investing and will deliver success in our European private equity business.”

In addition, Michele Colocci, a senior Managing Director in the M&A group, will be promoted to Deputy Head of European Investment Banking, replacing Simon Smith. Colocci will report to Petitgas.

Commenting on the appointments of Smith and Warham, Petitgas said, “I would like to take this opportunity to thank Brian for his contribution to our leading UK franchise and wish him well in his new role. We are delighted to have two skilled and experienced bankers, in Simon and Mark, whose expertise and deep client relationships will play a critical role in further building on our momentum in this key market. Finally, I would like to thank Simon who has been an excellent partner to me over the last 18 months and I very much look forward to working with Michele.”

About Morgan Stanley Investment Management
Morgan Stanley Investment Management, together with its investment advisory affiliates, has nearly 800 investment professionals around the world and approximately $560 billion in assets under management or supervision as of May 31, 2007. These entities offer investment management services to a diverse client base, which includes governments, institutions, corporations and individuals.

Press Releases

Morgan Stanley Appoints Stephen Trevor and Alan Jones as Co-Heads of Newly Established Private Equity Business Within Its Asset Management Division

Sep 26 2006 | New York

Morgan Stanley announced today that Stephen Trevor and Alan Jones will become Co-Heads of the newly established private equity business within Morgan Stanley Investment Management (MSIM). Mr. Trevor will join the Firm from Goldman Sachs, where he is a Managing Director in the Principal Investment area. Mr. Jones is currently Head of Morgan Stanley's Corporate Finance Department.

Mr. Trevor and Mr. Jones will be responsible for building and leading the Firm's private equity business for third-party investors. They will focus on direct investments, joint ventures, leveraged buyouts and fund investments and will oversee the Firm's infrastructure business as well. They will report to Owen Thomas, President and Chief Operating Officer of MSIM. Mr. Trevor, who will join Morgan Stanley in March 2007, will also become a member of the Firm's Management Committee.

Mr. Trevor, 43, has been based in New York since 2004, primarily focusing on industrial investing for Goldman Sachs' Principal Investment area. From 1999 to 2004, Mr. Trevor was based in London and led Goldman Sachs Capital Partners' investing activities in Germany. He joined Goldman Sachs in 1992 and previously worked in Hong Kong in the firm's Investment Banking and Real Estate Principal Investment areas. Prior to joining Goldman Sachs, Mr. Trevor worked at Time Warner, Inc. He received an M.B.A. from Harvard Business School in 1992 and was a member of the United States Olympic fencing team in 1984 and 1988.

Mr. Jones, 45, has been with Morgan Stanley since 1993. He is a Managing Director and has been Head of the Corporate Finance Department since 2005. Prior to that, Mr. Jones served for three years as Global Co-Head of the Financial Sponsors Group. From 2001 to 2002, he was Head of Global Leveraged Finance and from 2000 to 2001 served as Co-Head of Global Leveraged Finance. From 1997 to 2000, Mr. Jones was based in London, where he established and ran the Firm's European Leveraged Finance Department. Mr. Jones also served as a coverage officer in the Firm's U.S. Financial Sponsors Group from 1993 to 1997. He graduated from Harvard College and received an M.B.A. from Harvard Business School.

John J. Mack, Chairman and Chief Executive Officer of Morgan Stanley, said, "Steve Trevor and Alan Jones are a perfect team to lead our private equity initiatives. Steve Trevor is a world-class banker and leader with extensive private equity experience, having worked in the principal investment business in Hong Kong, Europe and, most recently, New York. Alan Jones is one of Morgan Stanley's most talented and influential bankers and has worked with financial sponsors for most of his 20-year career. His deep knowledge of Morgan Stanley's platform and his strong relationships in the private equity community will prove invaluable as we look to build our own private equity business."

"As we move to grow our private equity business, we are assembling a team of top talent from both inside and outside the Firm, and we are extremely pleased that these two very experienced executives will be leading our efforts," said Robert Scully, Co-President of Morgan Stanley. "Morgan Stanley's bankers offer unparalleled capabilities for sourcing investment opportunities, and our new private equity team will work to create investment funds that can leverage those opportunities and allow us to co-invest alongside our clients."

Owen Thomas said, "As we accelerate our private equity initiatives, our private equity team will utilize the full resources and capabilities of our firm to create industry-leading private equity products for the investors we serve."

About Morgan Stanley Investment Management
Morgan Stanley Investment Management, together with its investment advisory affiliates, has over 400 investment professionals around the world and $448 billion in assets under management or supervision as of August 31, 2006. These entities offer investment management services to a diverse client base, which includes governments, institutions, corporations and individuals.

About Morgan Stanley
Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, investment management, wealth management and credit services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 30 countries.

Press Release

Morgan Stanley Alternative Investment Partners Raises $1 Billion for Private Markets Fund III

Jun 16 2006 | New York

Morgan Stanley (NYSE: MS) announced today that Morgan Stanley Alternative Investment Partners (Morgan Stanley AIP) raised $1 billion in commitments for Morgan Stanley Private Markets Fund III ("Private Markets Fund III").

"We've had strong demand for this offering from clients worldwide," said Cory Pulfrey, Head of Morgan Stanley AIP. "The majority of our largest existing investors in our prior private markets fund have committed to Private Markets Fund III and we've also added a number of new limited partners, including insurance companies, endowments, foundations, pension plans, family offices and other high net worth investors. We believe that our successful fund-raising effort demonstrates a vote of confidence in both our highly opportunistic investment approach and our talented team of investors."

The objective of Private Markets Fund III is to provide investors with superior risk-adjusted returns through global investments in primary funds, co-investments and direct secondaries. Morgan Stanley AIP Global Diversified Fund LP ("Private Markets Fund II"), which Morgan Stanley AIP launched in April 2004, shared the same objective and raised $500 million in commitments.

Private Markets Fund III incorporates three main strategies: Buyouts, primarily North American and Western European, Global Venture Capital and Special Situations. Morgan Stanley AIP's investment strategy emphasizes less efficient market segments and targets managers with unique skill sets in the U.S., Western Europe and emerging private-equity markets like Japan. Morgan Stanley AIP currently expects that Private Markets Fund III, in addition to investing in private equity funds, will invest approximately one third of its committed capital in a combination of secondary interests and direct co-investments made alongside high quality financial sponsors.

"We proactively seek out investment opportunities that are unique and that other managers may not be as likely to consider," said Tom Dorr, Chief Investment Officer, Private Markets Team. "We continue to believe that attractive risk-adjusted returns can be achieved by having a global focus, a diversified portfolio and also by considering a wide range of investment opportunities broadly within private equity."

"The success of Private Markets Fund III clearly demonstrates investors' high demand for expertise in the alternatives space," said Stuart Bohart, Head of Alternative Investments at Morgan Stanley Investment Management. "Building our alternatives business is a key priority for the Firm and providing our clients market leading, innovative product offerings like this is critical to our strategy."

Morgan Stanley
Morgan Stanley is a global financial services firm and a market leader in securities, asset management and credit services. With more than 600 offices in 30 countries, Morgan Stanley connects people, ideas and capital to help clients achieve their financial aspirations.

Morgan Stanley Investment Management
The firm's investment management division, with over 400 investment professionals around the world, manages assets in excess of $442 billion and offers asset management services to a diverse client base which includes: governments, institutions, corporations, and individuals.

Morgan Stanley AIP
Morgan Stanley Alternative Investment Partners (Morgan Stanley AIP) is Morgan Stanley's primary portfolio of private equity funds and portfolio of hedge funds manager, and is part of the broader Morgan Stanley Investment Management business. As of June 16, 2006, the Private Markets team of Morgan Stanley AIP oversees more than $4.39 billion in private equity commitments in portfolios of private equity funds and separately managed accounts and is one of the largest fund of private equity funds managers in the world.

Thursday, November 29, 2007

Advertisements by Stock Broking Companies - 2007

30 November 2007

In the Mint, page 11 was completely devoted to SMC Global Securities. Half of the page was devoted to a writeup and an interview with Mr. Mahesh Chandra Gupta, VC and MD of SMC. The other half page is the advertisement of SMC

The theme is "1000 locations and still going strong"

Come be a part of India's fastest growing sub-brokers network.

*SMC, has grown from 400 offices to 1000 offices in just 2 years.
*SMC is commanding the faith of over 3,75,000 satisfied investors.
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*5th largest distributor of IPO in retail (Source: Prime Data Rankings)
*5th largest subbroker network in India (Source D&B Study)

SMC Punchline: Moneywise. Be Wise.

Its merchant banking unit; Nexgen Capitals Ltd. SeBI Regn.No. INM000010999
30 November 2007

In the Mint on front page right hand corner, there was an advertisement by Motilal Oswal Financial Services.
The advertising agency could not be traced from the ad.

This is a new ad. I am seeing it for the first time.

The theme of the ad is "Knowledge First"

It says, at Motilal Oswal we always know a little more. That is why we are able to spot trends early and make the most of market opportunities. KNowledge, it is said, has no substitute. Our clients will be the first to agree.

Important Appointments and Job Changes - 2007

JP Morgan - Barry Zubrow

November 2007

JPMorgan Chase has hired Barry Zubrow, a former co-chairman of Goldman Sachs’ risk committee, as its new chief risk officer.

Mr Zubrow, 54, was Goldman’s chief administrative officer when he left in 2004 to work as a senior adviser to Jon Corzine, the former Goldman executive who is governor of New Jersey.

Wednesday, November 28, 2007

Nationalf Investment Company Service Association - USA

NICSA Educational Tools

November 2007

In addition to conferences, NICSA offers a variety of online training and off-line publications to help expand your horizons.


NICSA Certified Mutual Fund Specialist Program

The NICSA Certified Mutual Fund Specialist (CMFS) Program is the first online certificate program of its type. NICSA's partnership with the Boston Institute of Finance represents the next generation of industry education, introducing a flexible approach to both educate and cross train employees in a broad spectrum of industry disciplines.

Now available: an all-new audio version of the course. Visit the Boston Institute of Finance for the full catalog, registration and more.

Reference Guides

Transfer Agent Compliance Guide

NICSA's Transfer Agent Committee has collaborated on this comprehensive, much-in-demand reference guide, now available for purchase. This important document should be on the bookshelf of every Transfer Agent's Compliance Department. Copies are now available for a nominal fee.

Committee Communique
NICSA's committees share their knowledge and experiences in a growing collection of articles and white papers.


NICSA's quarterly newsletter, now available online in PDF format. Featuring articles by industry experts, reviews of NICSA events and much more. Click below to view the latest issues.

Industry Survey/Studies

NICSA-D.M.R. Technology & Compliance Report
This timely report, based on detailed information received from 41 investment management firms, provides a well-informed perspective on Rule 22c-2 and other topics of immediate concern, including email retention and retrieval, trends and practices in information security, and more.

NICSA-D.M.R. CCO Compensation Survey
This survey offers top-line infomationinformation on what CCOs are earning today -- along with other topics you will find to be of interest. Executive summary now available for purchase.

NICSA-NQR Financial Services Industry Study
National Quality Review (NQR), in partnership with NICSA, conducts an annual Financial Services Industry Study. This unique industry study provides transfer agents and fund accounting/custody organizations an opportunity to examine and evaluate industry trends in productivity measures, service quality standards, organizational structure, and technology usage.

Annual Shareholder Satisfaction Survey
Conducted annually and used as a benchmarking tool within fund companies, this survey highlights trends and preferences in shareholder servicing. Plan now to participate in the 20th Annual Shareholder Satisfaction Survey scheduled for Spring 2007.

Scholarship Program

NICSA/William T. Blackwell Scholarship
The NICSA/William T. Blackwell Scholarship Fund, established in 1995 by the NICSA Board of Directors as a tribute to past president Bill Blackwell, recognizes the achievements of the children of employees of NICSA member companies.

Text Book

Mutual Fund Operations Textbook
The only textbook dedicated completely to mutual fund operations is available through NICSA. Mutual Fund Industry Handbook : A Comprehensive Guide for Investment Professionals was written by Lee Gremillion, Partner in PricewaterhouseCoopers' Minneapolis practice, and has already been utilized as a training resource by many major fund companies. This popular book is a comprehensive, college-level text which covers the history of the fund industry as well as topics such as front and back office operations, distribution, servicing, the global arena, and e-business-- including many case studies. Clearly written and engaging, Mutual Fund Industry Handbook, makes great reading for anyone who wants to enhance his or her knowledge of our industry.

Tuesday, November 27, 2007

PriceMetrix- Consultant - Trainer - Retail Brokers


The Senior Team at PriceMetrix brings a solid blend of experience to the opportunity at hand. Over the past two decades, the team has worked extensively with investments distributors and manufacturers, and has led change management efforts and revenue growth in a number of industries.

September 25, 2007

BMO Nesbitt Burns Takes Investment Advisor Professional Development to a New Level

BMO Nesbitt Burns Rolls Out PriceMetrix Productivity Program to 1,330 Investment Advisors

BMO Nesbitt Burns Inc. today announced a multi-year agreement to deploy the exclusive PriceMetrix Platform and Program across the Firm's network of 1,330 Investment Advisors, in 160 locations across Canada. The PriceMetrix Program empowers Investment Advisors to achieve a greater level of performance and realize opportunities for success.

Head Office Address:
PriceMetrix Inc.
40 University Avenue
Suite 200
Toronto, Ontario
M5J 1T1

Telephone and Fax:
Tel: (416) 955-0514
Fax: (416) 955-0501

Articles-Stock brokers

case Study - Charles Schwab - 2004

Articles - Strategy

IBM Study - A financial market renaissance - Ideas of 2015



Ranking by Mutual Fund Advisor

A study has been made on the brokerage firms that have survived the round of consolidations. The researchers took the following steps in order to provide for the realistic results of the study:

The researchers opened accounts with 14 brokers.

They purchased and sold corporate bonds, little and big stocks, and covered calls.

They executed numerous calls to the customer-service centers to check the responsiveness and overall customer service levels of the companies involved in the research.

Discovered the companies which charge their clients high transaction fees for out-of-network funds, in order to check the expenses surrounding the trade of mutual funds.

They thoroughly read through more than 1100 tax forms to check for the adequacy and thoroughness of the information provided.

The researchers verified the readability of account statements.

An evaluation of the brokerage companies' web sites was made for the purposes of determining their ease of use and navigability.

A cash rate was included so that the can choose among the best rates. Another option is the transference to money market funds that give high yields.

The following chart provides the results of the study, but keep in mind that the company on the first position is not suitable for day traders or investors heavily concentrating on mutual fund investment.

Charles Schwab
Bank of America
TD Ameritrade
Wells Trade

Recent Mergers in SMIs


Some of the major mergers that took place during this period were the ones between Ameritrade and TD Waterhouse, which gave as a result TD Ameritrade, and the acquisition of Harrisdirect and BrownCo by E*Trade.

Articles - Ethics

Does payment for order flow to your broker help or hurt you

Deep Discount Brokers USA

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Less than $50,000 in assets and 0-29 trades/quarter : $12.99


1. Business Concept and Regulation




1. Business Concept and Regulation - SB

In Section 2(gb) of SEBI (Stock Brokers and Sub-brokers) Regulations 1992, the term stock broker is defined.
The definition says “stock broker” means a member of a stock exchange;

Section 2(ga) defines, “stock exchange” means a stock exchange which is for the time being recognised by the Central Government or by the Board under section 4 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);

In Section 2 (gc) the term sub-broker is defined.
“sub-broker” means any person not being a member of stock exchange who acts on behalf of a stock broker as an agent or otherwise for assisting the investors
in buying, selling or dealing in securities thorough such stock brokers;”]

1. Business Concept and Regulation - IB

1. Business Concept and Regulation - MF

2. Organisation of specific companies

2. Organisation of specific companies - SB

2. Organisation of specific companies - IB

2. Organisation of specific companies - MF

3. Products

3. Products - SB

3. Products - IB

3. Products - MF

4. Marketing and Sales

4. Marketing and Sales - SB

4. Marketing and Sales - IB

4. Marketing and Sales - MF

5. Research of various assets under various methods

5. Research of various assets under various methods - SB

5. Research of various assets under various methods - IB

5. Research of various assets under various methods- MF

6. Fund Management

6. Fund Management - SB

6. Fund Management - IB

6. Fund Management - MF

6. Fund Management - MF

7. Corporate and Business Strategy

7. Corporate and Business Strategy - SB

7. Corporate and Business Strategy - IB

7. Corporate and Business Strategy - MF

8. HR Issues

8. HR Issues - SB

8. HR Issues - IB

8. HR Issues - MF

Monday, November 26, 2007

9. Finance Issue

9. Finance Issue - SB

9. Finance Issue - IB

9. Finance Issue - MF


10.Compliance - SB

10.Compliance - IB

10.Compliance - MF

11. Mergers and Acquisitions

11. Mergers and Acquisitions - SB

11. Mergers and Acquisitions - IB

11. Mergers and Acquisitions - MF

12. IT systems

12. IT systems - SB

12. IT systems - IB

12. IT systems - MF

13. Backoffice/Operations

13. Backoffice/Operations - SB

13. Backoffice/Operations - IB

13. Backoffice/Operations - MF

14. Procurement/BPO

14. Procurement/BPO - SB

14. Procurement/BPO - IB

14. Procurement/BPO - MF

15. Industrial Engineering

15. Industrial Engineering - SB

15. Industrial Engineering - IB

15. Industrial Engineering - MF

Topic 16 Risk Management

Topic 16 Risk Management - Stock Broking

Topic 16 Risk Management - Investment banks

Topic 16 Risk Management - Mutual Funds

Topic 17 Miscellaneous Issues

Topic 17 Miscellaneous Issues - Stock Broking

Topic 17 Miscellaneous Issues - Investment banks

Topic 17 Miscellaneous Issues

Online Broking - Evolution and Strategic Initiatives - International


Following the adoption of the Internet as a key trading channel by major players during the past several years, the US broking market witnessed explosive growth. There were around 18 million online accounts31 with more than 1 trillion USD in assets in 2000 -- more-than double the 7 million accounts and 430 billion USD in assets in 1998. Online trades accounted for more than 40 percent of all retail trades in the US market. In just three or four years, both average online trades per day and the number of online broking firms rose more than 10 times to 1.1 million trades per day and 200 firms in 2000..

From a later starting point, online brokerage is also showing spectacular growth in other countries.

The European market more than doubled to 3.7 million accounts in 2000.

Germany has taken the lead in terms of absolute numbers with around half of the market, followed by Sweden, France, United Kingdom, Netherlands, Italy and Spain.

There are already around 150 players on the European online broking market.

There were an estimated 305,000 online investors in the United Kingdom in the first quarter of 2001 (up by 6 per cent from 2000:Q4), and the number of online trades was 776,000.

In Japan, according to a March 2001 survey, there are 1.9 million online trading accounts, an increase of 46 per cent in six months. More than a third of stock trading by individuals (“retail trades”) was conducted online during the six months from October 2000 to March 2001.

In Hong Kong, China there was a staggering 99 online brokers in April 2001 (and an additional 8 brokerage advisors), but no information is available about the number of actual clients.

In Turkey, and estimated 13 per cent of the daily orders on the Istanbul Stock Exchange in early 2001 were conveyed to brokers via electronic networks. On current information, e-broking penetration (defined as the number of online brokerage accounts relative to total population) is internationally high in countries such as Canada, Korea, United States and Sweden.

Online Broking - e

Integration of ILFS Investmentsmart by Etrade

IL&FS Investsmart came into being on September 1, 1997, as a wholly owned subsidiary of Infrastructure Leasing & Financial Services. IL&FS is a leading non-banking, financial company that primarily promotes infrastructure development.

Investsmart is a financial services company engaged in intermediation of financial products and financial advisory services for retail, institutional investors, and corporates. It also forayed into merchant banking and commodity broking business, besides distribution of insurance products. Such impressive parentage helped the company in the early days to get good institutional clients. But overall the financials were not looking very attractive.

In 2,000, ORIX Corporation, an integrated financial services group based in Tokyo, picked up 27.59% stake in the company. The same year it launched its fully functional website, In January 2002, it amalgamated IL&FS Merchant Banking Services and DebtonNet India with IL&FS Investsmart.

These consolidation exercises were taken to build a strong balance sheet and to prepare itself for the future. After its public issue at Rs 125 in July 2005, the scrip is still hovering at around Rs 170-200 for the last two years. For instance in 2006-07, both its topline and bottomline took a hit in view of the stagnant growth and branch expansion exercises. It set up 37 new branches.

Revenue rose marginally by 7% from Rs 224 crore in 2005-06 to Rs 241 crore in 2006-07. Similarly, operating profit dipped to Rs 70 crore from Rs 117 crore in the previous year. But with E*Trade as its partner, the future will surely not be a mirror of the past. Already there are visible signs of change. A comparison of retail revenues for 2006-07 and the current six months, gives a clear picture of this change. These figures held the shape of things to come.

E*Trade reported net revenues of USD 2.4 billion or Rs 9,600 crore in 2006 with net income of USD 629 million or Rs 2,500 crore. It manages retail client assets worth USD 194.9 billion and customer cash and deposits at USD 33.6 billion in 2006. E*Trade has grown through the acquisitions route. It did three major acquisitions between 2005-06. So, what did a big player like E*Trade see in IL&FS?

Devinjit Singh, Head-Investment Banking, Mergers & Acquisitions India, said, ?Well in that particular case, I guess there were two or three things which E*Trade was looking to achieve. The first was to be able to acquire a business which had customers. Second, was to acquire an established platform for the distribution of its products. Third, was an access to the management that Investsmart had built. All of which probably proved appealing to E*Trade to establish and grow its business in India.?

Etrade did not suddenly acquire Investsmart. It came in when SAIF Investment Company, Mauritius, an affiliate of Soft Bank Corporation USA decided to have an Indian presence. Soft Bank was also a stakeholder in E*Trade. So, E*Trade too decided to take up 14% stake in Investsmart while SAIF took a 20% stake. That was in January 2005. In July 2005, the company came out with an IPO issue where stakes got diluted. A GDR issue closely followed this in December 2005.

After getting a taste of the Indian market for over one year, E*Trade felt it opportune to raise its stake further to 43% in March. E*Trade increased stake to 17.86% while subscribing to Investsmart?s GDR issue in December 2005, further increased stake to 37% by purchase of GDRs from the secondary market and then acquired 6% through open offer.

*(Announced a tender offer for an additional 20 percent of the shares of IL&FS Investsmart Limited, one of India's leading financial services organizations, providing a complete range of Financial Management Solutions for Retail and Institutional customers(July-September 2006)

This now makes it a core partner with IL&FS having a 29% stake. By beginning of 2006, not only did Investsmart have a strong partner in E*Trade but also oodles of cash to expand its business. Its kitty was Rs 550 crore, of this Rs 440 crore came from GDR proceeds and the balance Rs 110 crore from IPO. That money is now going to change the dynamics of the business.

Sachin Joshi, ED-Finance and Operations, IL&FS Investsmart, said, ?The purpose of having the GDR and IPO was to go in for major expansion for branches and mobilise resources which could be utilized to undertake securities and securities related financing activity. With E*Trade coming in as a strategic partner, we could also look at few acquisitions over a period of time. We mobilized about Rs 550 crore out of the IPO and GDR proceeds. Add to that our own network, today we have about Rs 750 crore of surplus cash available in the system, out of which at least Rs 650 crore could be utilized to do all these activities and change the face of the balance sheet.

Besides money muscle, Investsmart now has huge marketing and technological benefits by partnering with E*Trade. It will change the way Investsmart does business. Investsmart can now rely heavily on the expertise developed by E*Trade in developing brand architecture, marketing strategies, and tools to position the company as a dominant player in the domestic market.

More than operational expertise, what E*Trade Financial brought to the table was the experience of surviving the boom-bust cycle. This fast growing brokerage firm suffered red ink in its balance sheet in 2001, when the dotcom bubble went bust. But E*Trade survived all of that, and it bounced back with full vigour. This rich experience is what E*Trade now brings to Investsmart.

How E*Trade changed the way business was done at Investsmart?

To start with, it adopted its global policy of focused strategy and focused execution. What E*Trade brought to the table was its strategy behind providing the products. Customer service, branding, and technology all of these will give Investsmart a competitive edge.

What E*Trade brings on the customer side is focus. Till E*Trade came into the picture, Investsmart was trying to cater to all kinds of customers like low-end, middle-level, and high-end. Catering to people at all levels meant precious time spent on servicing low-end customers, thereby losing a high-end customer. Now, all of that will change.

Sandeep Presswala, ED-Retail Business, IL&FS Investsmart, said, ?One of the very important things that has happened post E*Trade coming was that they used to have a fairly defined customer focus. We have identified the mass affluent as a customer audience where we want to define all our focus and energies on. We see the segment as a fairly important segment in our scheme of things as we go forward. Looking at the growth of the service sector and looking at the growth of corporate India mass affluent, which is the most important segment in our customer segmentation strategy, is going to be the key focus area for our business going forward. Once you have a customer focus at the center of your business strategy, everything revolves around that.

But finally what matters is making the right call in a volatile and global market. That is only possible by good research back up. In a globalised India, where the economy is impacted by international events, financial research cannot be done on a standalone basis, but has to be done on a consolidated basis. Investsmart realized this two years ago.

According Sreesankar R, Head of Research, IL&FS Investsmart, they have a strong research team out here and we have created a team of around 22 people right now in India.

We have an exposure to the retail and institutional side of the market. In addition, we have an investment banking team as well, in which everything has been created over a period of 30 months.?

E*Trade follows a different business model. They do not have a research team. They outsource research and are more of an execution broker, than a full investment bank, in terms of the institutional and retail search, and investment banking activity. With our research, we will be able to give it to institutional clients of E*Trade and also offers in IPOs and various deals, that we bring about will be able to be distributed to those clients as well.

Integration of new processes in any organization takes time. E*Trade is testing Investsmart for adoption of its technology and marketing processes. Bringing about a whole mindset change is not going to be easy. How is E*Trade going to manage that?

Leslie Whiteford, MD and CEO, IL&FS Investsmart, has over 25 years of experience in the financial services sector. He comes with 18 years of experience with E*Trade?s operations. A chartered accountant by profession, Leslie brings the rich expertise of the global financial markets into the country. Having acquired several companies, he knows exactly what integration is all about. what his plans for India?

Excerpts from CNBC-TV18's interview with Leslie Whiteford:

Q: Why did you choose IL&FS?

A: When we were introduced to IL&FS, we found a company that shared some of the values that we have in our business. Basically, it is an offering to the customer of competitive priced products, with a superior level of service and traditional core values.

Q: E*Trade would also be bringing in and changing a lot of processes at Investsmart and that means a kind of mindset change. How has it been till now?

A: The one thing I found is that the management and the employees here have been very receptive to new ideas coming in, new approaches and new styles, in terms of implementing and executing it. Yes, anything new is uncomfortable. But I think they have coped very well in doing that.

I would say the main changes we are bringing in, is a greater amount of discipline around the business processes and decision-making. There are vast opportunities out there in the marketplace and it is impossible to go for every single opportunity that exists.

Similarly, in terms of technology development, you have got a limited pool of technology resources to be pulled from. You have to formally evaluate which one to do. So, rather than being driven by the emotion or whoever is the most powerful personality, to get their project done ahead of someone else?s project, we have brought in a greater discipline of evaluating what the returns are, based on some of the technology developments.

Q: Have they been fast to adapt to your kind of technology changes, has there been any kind of integration issues?

A: They have been fast to adapt and accept the vision. I think where you are taking management out of a frontline business position into more of a product development area, they feel that they have lost a little bit and have moved away from the edge.

Change is uncomfortable, but I think they all believe in the fact that this discipline does position us well for the dramatic growth that we are expected to see in the marketplace.

Q: So what are the kinds of changes that you are going to bring here to see that Investsmart also becomes a kind of a diversified financial services company?

A: Let me deal first with the online sector. I think the Indian investor is still very much in its infancy, in terms of the developments of the marketplace here. Look for the human touch, human support, human advice and the validations of what they want to do. And quite clearly that is why we have seen the broad rollout of the branch structures and the franchisees structure, that we share with many of the other participants in the marketplace.

The online space is going to come at a later point in time. So, in the interim, we can use our technology to deliver the tools to our employees in the branches, to enable them to provide better, more efficient, faster advice to the customers that they are serving.

The first space would be giving better tools to enable our relationship managers, our customer service representatives to provide the best service to the Indian investor and ultimately to allow the Indian investor to take control of a lot of these things themselves.

Q: What is the kind of branding exercise that you have planned for Investsmart? Are you going to do some name change?

A: IL&FS Investsmart is known as a financial multiplex and has multiple products within its product suite. The challenge that we face is that they were all running on separate platforms. So, it was almost like running eight separate businesses. So, if you had 1 customer who wanted say eight products, he could have eight different customer experiences. So, from our point of view, we wanted to integrate the product offering, not only in terms of the back office platforms, of bringing them together; but also in terms of front office.

The customer service representatives, the relationship manager could see on a single position all the areas that an investor and customer engaged with the firm.

So, getting that technology up and running and solid and making sure that it is scalable is where we have been focusing for the past few months and really just trying to shape our vision.

Moving on to the branding, you obviously don?t want to go in and create a brand and spend the dollars, until you feel that your infrastructure is there to support the product and service and you feel that you are marketing to your customer. So, we are just at the stage of moving into that era. I think the challenge for the marketing agencies is to take three very different brands and bringing them together, each standing for something that means something to different types of investor groups. So, we are still at the stage of formulating and how we are going to do that.

A: I wouldn?t see it so much as catching up. It is always a challenge to pick what the right time is to enter into a marketplace. If you were to consider that our main expertise is in the area of technology and online applications, compared to our peer group, we are well ahead. We are the only one of our peer group in the US, that are expanding internationally. So, that is looking it at from our peer group and the position in that space.

In terms of the Indian marketplace, there are still many foreign brokerages coming into India and increasing their stakes with partners in the Indian marketplace. We have been in for about two years. So, we are not that far behind.

We have been taking our time and making sure that we have got our positioning right. We have got our vision and our strategy right. We are all pretty firm and agreed on that space.
In November 2007 , the MD is still optimistic.

19/11/2007 interview with Leslie Whiteford Economic Times

Don’t you think E-Trade is entering the Indian market at the peak of the bull-run?

The stock market index may be near its historic high, but there is still immense growth potential in India. Retail investors have only begun to invest in equity and online trading in India is still in its infancy, compared to the US where E-Trade enjoys a leadership position and continues to grow. But there are greater growth opportunities outside the US and the decision to enter India is part of E-Trade’s international strategy to tap this opportunity. We have already obtained 17 licenses around the world and have a presence in a number of European and Asian markets. Early this year, E-Trade started operations in Dubai and Singapore and it has been in Hong Kong for a while. E-Trade is watching China, but the country has tight restrictions for foreign brokerages.

Does E-Trade wants to look at the Indian market beyond being a broking entity? Do you have any plans to set up a bank or MF or any insurance company at a later date?

Within the IL&FS Investsmart group, we already have a non-banking finance company and can offer a comprehensive financial solution to our clients. IL&FS group already offers margin-financing, loan against securities, IPO financing, loans for mutual funds and other related facilities. In the US, one of the drivers for E-Trade’s growth was the successful integration of the banking and brokerage businesses. IIL can’t bring that level of integration in India right now due to regulatory restrictions.

There are restrictions on foreigners entering the banking sector and on banks lending to the capital market, which make it challenging for IIL to fully replicate the E-Trade US model. The norms are expected to be liberalised in ’09, which will provide us an attractive opportunity.

Our business model will balance the regulatory restrictions with the needs of our customers. We don’t have any real desire to foray into the mutual fund (asset management) or insurance business beyond our existing advisory and broking business at the moment. Our focus right now is on the advisory and trading side of the business and we would rather build scale in that segment. - Form 8K of Etrade dated 18 October 2006,curpg-1.cms 19-11-2007

Sunday, November 25, 2007

online broking India - I

September 2000

Emergence of e-broking

Online trading (also called e-broking) is slowly attracting investor fancy in India.

Advertisements are appearing in the print and electronic media.

A small beginning

The current trading turnover at around Rs. 10 crores per day from online trading compared to a combined gross turnover of around Rs. 9000-10,000 crores handled by the BSE and NSE together. online trading has a long way to go. With some ten dotcom players, such as, investsmart,, indiabulls, and a host of brokers, such as kotakstreet, sharekhan, motilaloswal, Geojit Securities and duttstock, entering the online ring promises exciting times ahead.

brokerage : For instance,, as the first entrant into e-broking, charges the highest brokerage (for delivery transactions) at 0.85 per cent per trade. It is followed by InvestSmart which charges 0.75 per cent. However, late entrants such as, sharekhan and all charge 0.25 per cent of the transaction value for delivery-based trades.

Clearly, the pattern of entry into e-broking shows that ``brokerage and associated costs'' can be the differentiators only for a while. as the first entrant, has touted itself as the first integrated e-broking service provider in the market. Though its brokerage charges are higher than its peers, it has positioned itself as the only player to have online broking, banking and depository interface in one module, to offer a fully integrated online trading experience.

Players such as SSKI's sharekhan, which launched their scheme in July, have tried to steal a march over by introducing a flat fee product of Rs. 1,000 per month. This trade-as-much-as-you-want scheme was an innovation targeted mainly at frenzied day-traders.

But even this innovation of sharekhan was challenged., which launched its e-broking services in August, not only halved the flat fee from Rs. 1,000 to Rs. 500, but also allowed short sales and offered clients the option of trading against securities up to three times sales marked for delivery.

Reacting to the cut-rate discounts, ICICI Direct has reduced its minimum brokerage per trade from Rs 100 to Rs 25 and the minimum trade size from Rs 6,000 to Rs 1,000.

Clearly, innovation offers limited scope for it is a matter of time before almost all the schemes offer more or less identical features.

As online trading is still at a nascent stage, practically all the major players which have set up e-broking outfits, aim at achieving two objectives. One, to broadbase the overall trading of investors, while holding their existing clientele intact. Two, most established e-broking outfits, such as, investsmart (an IL&FS initiative) and, are using their brick-and-mortar presence to encourage investors to go online. Given the poor connectivity and Internet infrastructure, most e-broking majors are trying to raise the comfort level of the investors by assuring them that even if the Internet order-routing system breaks down, or investor access is broken for any reason, online registered investors can always exercise the option of putting through their orders offline.

Except for Probity's 5paisa ( and India Bulls, most other online brokerages are an extension of brick-and-mortar broking.

As this combination is still a new concept, most investors will be better off clarifying how the offline environment will operate, if the online environment fails for any reason. For the investor, the important thing is to ensure that this switch from online to offline is seamless and that there are no associated hidden costs.

Unless the online trading volumes increase dramatically to 10-15 per cent of the total trading volumes (or at least 20 per cent of the gross turnover of the BSE and the NSE), the brick-and-mortar outfits will continue to dominate.

Success factors:

The pedigree of the e-broker: The pedigree of the e-broker is important as that is likely to identify the serious players. Going forward, consolidation is inevitable even in this industry and when that happens, online trading sites such as, investsmart and with a good pedigree have a much better chance of survival than the stand-alone sites such as and Indiabulls.

Technology and infrastructure: In these early months, online trading is likely to attract a host of entrants as India has already seen so far. But the key differentiator will be the investment in technology and back-office infrastructure. Even if small-time e-broking outfits make the initial investments in technology, the recurring expenses, which would also be high, may prove to a burden in the long run.

Quality of service and security: As the industry quickly consolidates and technology gets standardised, the quality of service will be the key differentiator. Basically, the investors do evaluate the quality of service and ``security-related issues'' (say, in terms of 128-bit encryption or privacy/confidentiality in access), between two outfits. In the long run, depending on the service levels, investors switch to the better player.

Integrated package: Currently, only offers a seamless 3-in-1 package of broking, banking and demat accounts. This effectively means that through the click of a mouse, an investor can buy and sell shares, and forget about the paperwork involved in settlements and transfer of shares or money. The rest of the players are also putting such an integrated package in place, but has a headstart as the others may be able to offer an seamless online trading experience only after an independent payment gateway (which provides connectivity between different banks for online banking) is firmly in place.

However, the existing online trading system suffers from a major lacunae. currently offers online trading services only to investors who have a bank or a demat account with ICICI. Or, investors can open an online trading account with only if they open a demat account with Kotak Securities and have a bank account either with Citibank, HDFC Bank or Global Trust Bank. If investors do not have these accounts, they have to go through the entire rigmarole of opening up the bank and demat account again for easy operation. Apart from the hassles involved, there may also be certain extra charges involved in this exercise that may have to be built into the overall cost of online trading.

e-broking transaction charges 2000

ICICI Direct

Account opening charges: Rs 750 only. For accounts opened before March 31, 2000, the account opening charge of Rs 750 will be set off against the brokerage paid for all trades done till September 30, 2000.

Fee Structure:

Delivery trades:
Less than Rs 1 million per quarter: 0.85 per cent
Rs 1 million to Rs 5 million per quarter: 0.60 per cent
Rs 5 million to Rs 10 million per quarter: 0.50 per cent
Rs 10 million and above per quarter: 0.40 per cent

Intra-settlement trading: The same fee schedule applies for squaring off transactions, but the above brokerage is to be paid only for the first leg of the transaction.
Minimum size order: The minimum value of the trade is Rs 1,000 and the minimum commission is Rs 25 per trade inclusive of demat market transaction charges, service taxes and postage of contract note.
Banking: ICICI Bank only
Margin: 100 per cent
Offline broking: Option unavailable
Shortselling: In the offing
Demat: ICICI Bank, no extra charges

Account opening charges: No fee charged for plan A and B. For plan C and D, a fee of Rs 500 is charged which will be adjusted against future trades.
Banking facility: HDFC or Global Trust Bank
Offline broking: option available
Minimum size order: none
Shortselling: option unavailable
Demat: SSKI, extra charges
Stamp duty, turnover tax and contingent charges extra as applicable: approximately Rs 25 per Rs 100,000

Fee Structure:

Plan A: Power-Asset Account
Rs 1,000 per month for intra-settlement. The value of trade is limited only by the cash in the account for purchases and by shares in the account for sale.

Plan B: Power-Leverage Account
The fee charged is Rs 1,000 per month with no limit on trading. Twenty-five per cent margin is required. The value of any individual trade can be as much as four times the margin in your account.

Plan C: Classic-Asset Account
The fee charged is 0.25 per cent of trade value. This is targeted at those who are not yet ready for flat fee-based investing. The value of trade is limited by the cash in the account for purchases and shares in the account for sale.

Plan D: Classic-Leverage Account
The fee charged is 0.10 per cent of trade value for intra-settlement trades. The value of any individual trade can be as much as four times the margin available in your account.

Account opening charges: Rs 500 only
Intra-day: 0.05 per cent for each trade
Intra-settlement: 0.05 per cent for each trade
Delivery: 0.25 per cent
Banking facility: HDFC Bank
Margin: 25 per cent
Offline broking: Option unavailable
Shortselling: Available
Minimum size order: None
Demat: IIT Corporate Services, extra charges


Account opening charges: Rs 500 only, which will be adjusted against future trades.
Margin: 33.33 per cent, minimum Rs 5,000.
Offline broking: Option unavailable
Banking: HDFC Bank, HSBC, Global Trust Bank, CitiBank, Standard Chartered, ABN Amro or Centurion.
Shortselling: Information unavailable
Minimum size order: Rs 1,000
Demat: Kotak Securities, no extra charges.

Fee structure

The Green Channel (Cash)
In this plan, one can trade up to three times the value of the margin with
Delivery brokerage: 0.25 per cent.
Intra-settlement brokerage: 0.10 per cent payable for both legs of the transactions.
Intra-day brokerage: 0.10 per cent for the first leg only
Service charge and other levies: Nil

The Green Channel (Securities)
In this plan, traders can pay margin in the form of securities instead of cash.
Delivery brokerage: 0.25 per cent.
Intra-settlement brokerage: 0.10 per cent payable for both legs of the transactions.
Intra-day brokerage: 0.10 per cent for the first leg only
There is an additional transaction charge of 0.15 per cent per month on the value of the applicable limit.
Service charge and other levies: Nil

The Freeway
This scheme allows investors to trade at a flat fee of Rs 500 per month up to a maximum exposure limit of Rs 250,000.
The brokerage works out to 0.20 per cent.
Service charge and other levies: Extra

The Cash Expressway
This facility allows retail investors to sell their shares and collect the payment within 48 hours.
Delivery brokerage: 0.25 per cent and a transaction fee of 0.5 per cent on the sale value.
Service charge and other levies: Nil

April 2005

Customer based at the end of 2004

The online broking arm of ICICI Web Trade, an ICICI Bank subsidiary, commands 68 per cent of the total online trading market. Its customer base has grown from 300,000 last year to 550,000 today. It has 450 branches across India, and also covers Singapore and the Gulf.

The long-term plan is to graduate from being just an e-brokerage to a one-stop shop for personal finance products and services. The platform already sells health, home, overseas travel and life insurance products online. While you can pay online for general insurance products from ICICI Lombard, a physical follow-up from ICICI Pru representatives is necessary when buying life insurance products. The portal also enables online investing in postal savings instruments such as NSC and KVP. It has made CallNTrade available across 300 towns, allowing customers to use the phone to trade if they are unable to get online.

All bank transactions have to be through ICICI Bank– the direct connectivity between trading, demat and bank accounts makes transactions quicker and safer. ICICI direct is also the first broker in India to introduce Digitally Signed Contract Notes. The process has been automated and they are instantly and securely available online.

The customer base of the next popular trading platform has increased about 40,000 in December 2003 to 63,000 today. The portal allows trading in equities, derivatives and mutual funds, besides offering insurance and loans online. It has 78 branches in 64 cities, and it hopes to double this number over the next year.

The site gives customers real-time data and prices, and analysis backed by powerful technology. Service is real-time with 24x7 access to all information on the portal. The company has a tie-up with HDFC Bank and ABN Amro Bank for banking, and clients are not bound to use a specific DP account. Indiabulls’ charges are competitive: 0.5 per cent of the order value for the cash segment and 0.1 per cent for derivatives.

------------ICICIDirect-------- India Bulls
No. of clients1---510,000-------------63,000
(As on 1 Dec 2004)
Brokerage (% of order value)
Cash segment---0.25 to 0.75% ------------- 0.50%
Intra-day------ 0.03-0.10%---------------- 0.10%
Derivatives----- 0.03-0.10%--------------- 0.10%
Sign-up fee (Rs-----) 750------------------ 700

October 2006

Innovations in online broking — flat fee structure spreading

The flat fee model charges the clients a fixed brokerage for a specified period, irrespective of the frequency or value of transactions.

So, if you are a very active trader, then flat fee broking products may suit you better.

ICICI's Offer

Monthly fixed rate Rs. 299
max quarterly free turnover: Rs.1,50,000
Brokerage above that amount: 0.6%

Monthly fixed rate Rs. 599
max quarterly free turnover: Rs.3,00,000
Brokerage above that amount: 0.6%

Monthly fixed rate Rs. 999
max quarterly free turnover: Rs.9,00,000
Brokerage above that amount: 0.5%

Kotak SEcurities offer
Monthly fixed rate Rs. 499
per transaction fee: Rs. 9;

Otherwise per transaction fee: Rs. 20; (delivery transaction size: Rs.5000)

In the Western markets, where almost 50 per cent of the cash market trades are done online, the success of the flat fee model can be attributed to the popularity of Internet trading.

In India, where an estimated 12-15 per cent of the total cash market volumes are done online, the flat fee regime has a long way to go. The products offered are still at a nascent stage and cater to the needs of a specific group of investors only.

Why the transition?

At a time when Internet broking is emerging as a popular trading tool, scalability and accessibility have become realistic goals for the broking houses. The broking industry is thus attracting a lot of new players. With such entrants as ABN AMRO Asia Equities, Religare and, the much talked about, R-Trade, competition is set to become tougher for the established players.

Japanese Mutual Fund Industry

While investors remained focused on the influence that foreign buying was having on Japanese stock prices, the number of individual investors was actually rapidly rising, from 15 million in 1990 to nearly 40 million today.

Given the recovery in stock prices, Japan’s investment trust (mutual fund industry) has come roaring back, with total assets in publicly offered investment trusts now at a new historical high of just under JPY50 trillion, while the balance of stock funds is still 13% below the 1989 peak at just under JPY20 trillion?even as stock prices remain at only half of what they were at the December 1989 peak.

Like what was seen in the U.S. during the 1980s and 1990s, TJI continues to see the potential for a Japan version of "the greatest financial story ever told", i.e., a continued structural shift in Japan’s personal financial assets over the next decade.

If the exposure to investment trusts and equities in Japanese personal financial assets rises to levels similar to the share in US personal financial assets, it will represent a potential inflow into Japanese stocks of over JPY300 trillion, or fully half of current market capitalization. In addition, Japanese financial institutions have largely completed their house cleaning of losing positions in their stock portfolios, and are again beginning to accumulate stocks.

Consequently, as was seen during the rally between October of 2005 and in the first quarter of 2006, the influence of foreign buying on stock prices is being diluted by net positive fund flows into stocks by domestic investors (as opposed to day traders buying stocks on margin).


Online stock broking

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Study of competition between full service brokers and online brokers - 2005

Download a case on Etrade - 2000

Response to Internet Broking Opportunity by Various Brokers

The short history of e-business includes many companies that were too rigid to respond quickly to the Web's disordering influence on their industries - and found themselves in a potentially unwinnable game of catch-up.

Initially deep discount brokers embraced online broking. Only after many years full service brokers changed to it.

Merrill Lynch & Company, for instance, resisted Web-based brokerage services for four years, while companies both new and extant, such as E-Trade, Charles Schwab and smaller discount brokers, stole its customers away by offering an efficient, inexpensive approach to buying and selling stocks. Merrill's public antipathy to the Internet was so strong that in August 1998 its vice chairman and brokerage chief, John "Launny" Steffens, said Internet trading "should be regarded as a serious threat to Americans' financial lives."

Merrill's paralysis, though, had nothing to do with protecting the citizenry; it was stoked by an internal culture clash. The company's powerful cadre of 15,000 brokers saw its commissions, which averaged nearly 30 percent of gross production, threatened by Internet trading and lobbied hard against it.

Merrill is far from the only high-profile company stymied by its own culture. When opened shop on the Internet in 1995, Barnes & Noble Inc., which had just gone through a feverish period of growth that included the debut of its innovative cafes and music shops within supersized bookstores, didn't take e-tailing seriously. Internally, the emphasis was so rooted in expanding the bricks-and-mortar chain that any other sales channel just didn't make the radar screen.

Merrill Lynch eventually had to cave in to the inexorable growth of online trading, even if its corporate culture wasn't ready to accept it. Last June, Merrill announced a complex plan that set Internet transaction fees at about $29.95 per trade, on a par with Charles Schwab.

Although Merrill has won plaudits for the quality of the online strategy it has disclosed, the company's halting approach to e-business is still hurting it. Its online trading site, which opened in December 1999, is not expected to be fully functional until mid-2000. Meanwhile, other Internet brokers continue to cement their presence on the Web, signing up new customers - some of them formerly Merrill's. To rally brokers around its Internet strategy, Merrill has agreed to pay them the commissions they lose from Web trading for the next five years, an amount that could total hundreds of millions of dollars.

Merrill's Internet delay is reminiscent of how the giant brokerage firm handled its significant business dislocation 25 years ago, when the U.S. Securities and Exchange Commission outlawed industry-wide fixed commissions. Merrill, like most of its competitors, used this as an opportunity to raise transaction fees. Schwab took the other route and slashed commissions, in effect creating the discount brokerage model. Schwab's idea was not unlike that adopted by Internet brokers: Attract customers with bargains on transactions, which are essentially commodities, and make money on volume as well as sales of initial public offerings, research reports, asset-allocation advice, mutual funds and, more recently, investment banking.

Merrill, meanwhile, held off cutting commissions for as long as it could. By the time Merrill launched its less-expensive Web-based trading programs, Schwab and numerous other discount brokers were well established - and much more efficient moneymakers. In 1998, Schwab's pre-tax profit margin was 18 percent, compared with only 9.5 percent for Merrill and 10.7 percent for the entire brokerage industry. Equally impressive, Schwab's return on invested capital was about five times the industry average, while Merrill's had fallen behind its competitors.

Schwab was far from the first broker to offer online trading - it started in 1996, about four years after E-Trade Securities Inc. pioneered the concept on the CompuServe online service - but unlike Barnes & Noble in its battle with, Schwab quickly outpaced its Internet rivals. Schwab's culture was prepared for change and not hardened against it. As the discount brokerage forerunner, Schwab was born from innovation: Its commission schedules were already tied to inexpensive trades, and it had extremely advanced, cost-effective networking technology that powered its vast telephone and electronic trading systems. These cultural and infrastructural strengths were indispensable in making its Web presence a success. Without hand-wringing and cultural resistance during its preparation to launch an Internet site, Schwab could focus on deploying an online trading system that would match customer expectations. Schwab has captured 42 percent of all assets traded online, even though its transaction price - $29.95 per trade - is among the highest in the category.


Companies like Merrill Lynch that avoid alternative sales channels tend to lean on the same reason: They don't want to cannibalize their more lucrative existing business and wreak havoc on their pricing structures. Such companies see their current business as being under siege. Moreover, manufacturers - whether they make clothing, shoes, record albums or farm equipment - are also wary about upsetting their retailing or distribution partners by selling directly via the Internet.

Fighting the Cannibals

by Glenn Rifkin

The explosive growth in online stock trading has not been a solely American phenomenon. As their economy rebounded in 1999, Koreans began to embrace online equity trading with a vengeance. With Korean stock prices rising, online commission rates plummeted through the first half of 1999. Despite these discounts, the value of trades placed online jumped from 5 percent of all trades in January to 30 percent in August 1999.

Korean consumers are now so enamored of online trading that many employers must limit Internet access in order to keep employees from playing the market all day.

LG Investments and Securities Company (LGS) has led the rush into the online trading world. With 90 branches and 1,900 employees, LGS is the $500 million brokerage services arm of the LG Group, one of Korea's largest conglomerates. Founded in 1969 and operating primarily in Korea, LG Securities is an unlikely company to have thrived in the fast-paced world of online trading. Growth over the past few years has been slow because LGS's C.E.O., Ho-Soon Oh, was reluctant to expand or hire new employees during the economic crisis that began in 1997, as were many of his competitors.

Despite a cautious corporate culture, Hong-Soop Song, an LG branch manager, saw a new market for the company in the burgeoning field of online trading. Because the Korean market was virgin territory, the first mover would undoubtedly enjoy a huge advantage. Why shouldn't it be LG Securities, he wondered. "Based on my knowledge of customer behavior as a branch manager, and my study of successful U.S. companies, such as E-Trade, I realized that online trading was a huge opportunity for us," Mr. Song says.

In November 1998, he presented Mr. Oh and C.F.O. Seong-Hyun Yoon with a proposal for a major online-trading initiative. He suggested a tenfold increase in spending on I.T. infrastructure for the online venture: New telecommunications lines and more powerful servers would be required. He also noted that the effort would require only a modest increase in employees, an attractive feature for executives who were loath to fire employees in another economic downturn. Mr. Oh and Mr. Yoon were so impressed by the proposal that they approved it in only two days - a miracle in a bureaucracy where major decisions usually take weeks or months - and allocated it a $15 million budget. The system was up and running one month later.

Beyond the speed of its development, LGS's online trading operation succeeded because it was convenient for customers. Because relatively few Koreans use the Internet from home, LGS targeted Korea's 15,000 cybercafe-like "PC Rooms," which offer high-speed online access for an hourly fee. LGS negotiated alliances with 700 PC Rooms, which eagerly promote LGS's trading services in the hope that they will increase their own revenues. LGS designed the online interface to be as simple as possible, and even dispatched staff to branch offices to explain the system and offer advice. Finally, LGS trumpeted the new service in a country-wide advertising blitz.

The initiative was not without obstacles. Unions are strong in Korea and the brokers' union protested that commissions would be cannibalized by online trading. When Mr. Song spoke with the union in November 1998, online commissions equalled those from the branches. But by January 1999, online commissions had dropped to a point a whopping 80 percent lower than branch trading commissions and the brokers feared for their livelihoods.

Mr. Song argued that since online trading was inevitable, it would be advantageous for the brokers if LGS got into the market first. Furthermore, he assured them that LGS was truly committed to the new venture and, in an attempt to sweeten the deal, he said LGS would tie brokers' income to online revenues: The more online trades placed, the more money the brokers would make.

One year later, the numbers have proved Mr. Song correct. Before the advent of online trading, LGS's 800,000 customers made about 40,000 trades per day in branches. Today, the number of trades has skyrocketed to 240,000 a day - with 40,000 still being placed at traditional branches. In the end, online trading didn't cannibalize LGS's income stream, but created an entirely new source of revenue by encouraging customers to place 200,000 more trades each day.

Charles Schwab - Change in Marketing Strategy - 2002

Schwab to change marketing strategy
Firm to battle worries of investors on conflicts

May 2002 Sanfrancisco Chronicle

Charles Schwab will unveil new product offerings and a marketing strategy that capitalize on investor discomfort with the controversy over conflicts of interest that have plagued investment banks. One of the offerings is a new stock research service that will assign a letter grade of A through F to each of the 3,000 U.S. equities that the firm will cover.

The San Francisco brokerage intends to promote the service as free from those conflicts of interest on Wall Street.

In another service announcement that moves it far from its discount brokerage roots, Schwab also will launch an investment advice service for clients who want one-on-one dealings with a stockbroker.

Schwab also plans to set up a service that would even allow wealthy clients to delegate day-to-day management of their portfolios to independent advisory firms that are recommended by Schwab.

The moves come amid a prolonged downturn in trading activity for Schwab and other online brokers, as individual investors have been driven away by the bearish market and revelations over questionable corporate accounting and conflicts of interest on Wall Street.

Schwab said Monday that average daily trades were down 18 percent in April from the same month last year and down 6 percent from the preceding month.

Revelations about Enron, Global Crossing and a host of other companies have contributed to investor skepticism in the public markets. Meanwhile, concern has mounted that the analysts who promoted stocks during the Internet boom of the 1990s merely did so to attract the lucrative fees their banks could win by performing corporate finance services for the companies.

It's unclear how much cache independent research will have with retail investors. Industry observers say some investment banks have struggled with the concept of providing research service independent of their brokerage or investment banking operations but have been unable to find a way to make it "pay for itself."

Schwab's new research service, called Schwab Equity Ratings, is designed to help investors identify stocks that, based on Schwab's analysis, will either outperform or underperform the market. The research will be accomplished in part by quantitative computer analysis of company data as well as Schwab staff research. Schwab has been hiring staff to build its stock advisory service.

The stocks will be graded the same way a student gets scored on a test --

with A for outstanding, and F for failures, with A stocks expected to strongly outperform the market and F stocks expected to strongly underperform.

A's and B's will be considered buy recommendations, and D's and F's will be considered sell recommendations. Schwab is expected to offer an equal number of buy and sell recommendations, whereas Wall Street research is frequently dominated by buys.

This research, which is now offered to Schwab's private client and signature service customers, will be made available to to all of the firm's brokerage clients beginning in the fall.

Use of Customer Communities - Charles Schwab

1. The Deep Marketing Cycle in context (Source: Beagle Research Group, LLC)

I have seen an active community of men, 18 to 24 years old (a hard demographic to capture), who volunteer a great deal of information to the consumer products company, Unilever. This community provided insights into what the well-groomed young man thinks and does in his social life, insights that Unilever used to fine-tune its product—Axe Body Spray—and its marketing messages. Unilever credits its community’s input for helping to propel Axe to leadership status in its market, and the company won a 2005 Explor award from the American Marketing Association for its innovative use of technology.

Other industries
Communities, and Deep Marketing, are not simply for CPG companies, either. Charles Schwab, the financial services colossus based in San Francisco, also relies on customer communities and deep marketing to capture customer insights. Recent Schwab communities have included a group of customers who are active stock traders with a minimum amount of cash invested and another group composed of high-net-worth individuals with a threshold amount invested with Schwab.

Schwab customer community participation is quite good—a finding that might surprise conventional marketers, given the relative inaccessibility of these groups to traditional marketing approaches. But because Schwab appears to these customers to be actively listening to their input, and then tangibly making use of it, these people make the effort to contribute.

Not long ago, Charles Schwab, himself, wanted up-to-date information about his clients’ investing strategies and views of the market in preparation for a press tour. Schwab worked with the community administrators to craft a questionnaire, and, according to Schwab Vice President Jonathan Craig, “clients were literally writing essays to him about what they liked and what needed improvement.”

You might expect that kind of response for the boss, but it demonstrates the power of the community and the kind of response community hosts have come to expect when dealing in this realm.

excerpted from

Schwab's CMO on Branding 2006

Becky Saeger, CMO, Charles Schwab

2. How does your marketing strategy embrace new forms of media that are constantly emerging? What are your perceptions about the use of traditional media in your marketing mix?

As we embarked on our new "Talk to Chuck" brand campaign, we believed that executional innovation -- especially in the context of financial services -- was crucial. All of our research and all of our insights and instincts told us that reaching our objectives of differentiation, relevance and emotional connections would require touching our target audience in the context of their lives. Our client, the "average" investor, doesn't bifurcate his or her life into chunks that they set aside for financial services -- "it's 6:00 on Thursday, it must be investing time. . . " She's thinking about it during her commute, when she's drinking coffee, when she's picking something up at the laundry, when she's thumbing through Gourmet Magazine or online checking the sports scores. So we've made a concerted effort to try to reach her there.

We're experimenting heavily with new approaches to online media that have proven to be very effective in building interest in Schwab. And we're also finding that traditional media--yes, TV and even outdoor--continue to be important in achieving the awareness and impact we want--but we have to look at the entire media mix and take advantage of the synergies.

3. One of the key platforms in the "reinvention equation" is marketing accountability. How does your increased focus on accountability influence your marketing decision making?

Creating accountability has been absolutely key. I think its one of the most important mandates for marketers in general, but when you add in the variable that we faced, which was a business that was struggling to regain its historical norm of very high financial performance, you had an environment where we were picking up pennies everywhere we saw them, and in that environment you have to be able to prove that marketing is an investment for growth, not an expense to be cut.

One of our objectives over the last two years has been to build a culture of accountability. It reaches every part of the marketing organization and also informs the basis on which we interact with our business partners. We've put considerable effort into strengthening our database management capabilities, investing in better tracking and analysis tools, putting in place rigorous metrics to help us establish baselines for all our decisions. We test and learn in a more careful way. For example, before launching "Talk To Chuck" nationally, we spent six months in test markets to assure that we had a winning formula. This last year, we worked with an outside consultant to help us develop a marketing investment optimization model, and we've lifted our planning and decision-making process to a fact-based level.

4. How have you created brand loyalty among your consumers and what are you doing to keep them coming back?

At its most basic, we think of brand loyalty as the attachment that our clients have to the brand--their willingness and desire to stick with us, bring their next piece of business to us, refer their friends and colleagues to us. Lots of that attachment is reinforced by what our clients see of us in the marketplace: Are our communications relevant and compelling? Do they give the impression of a place that you can trust, a place that you belong and would be proud to be associated with?

But more fundamentally, brand loyalty stems from the client experience, and so it is a shared challenge that all of us in the business focus on day in and day out. Over the last two years during our turnaround, we focused intensely on reconnecting with our clients by simplifying our business model to make it clear what we stood for, by cutting costs of doing business with us to assure a great value proposition, by making sure that we weren't overburdening clients with excessive mailings and cross selling, and by reinvesting heavily into improvements in the client experience. The business now lives and dies by measurements of client loyalty, and that drives every choice we make--whether you are answering the phone in a call center, developing a new product or writing a direct mail piece.

5. Earlier this year USA Today wrote an article about your new" Talk to Chuck" ad campaign and how it’s a departure from your usually humorous ads What made you decide to change your approach and why do you think it was successful?

Change itself is relatively easy, and there is always a temptation to try and work your way out of a bad situation by going with something new and different. I think the real paradox of what we've accomplished with "Talk to Chuck" and the reinvention of the brand is that we asked ourselves first, what is really true and abiding about this brand? What makes us different that our clients truly value and we never want to lose?

We've been around for over 30 years now and have built an incredible amount of brand equity over those years. What is the essence of that? Once we were confident we understood that, it wasn't a question of doing the next great thing, it was a question of bringing new life and a freshness and relevance to what was already there and great. I believe our execution is very creative and innovative and yes, it is designed to startle and attract attention and to have an element of sly humor... Most important, we want it to feel relevant to investors' mindsets, to connect at emotional levels. But at the same time it reestablishes the core of what we stand for: trust, customer centricity, being an advocate for the individual investor, and providing great value.

Sep 2006