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Investment industry offers improved transaction times through the computer's use.

Investment industry offers improved transaction times through the computer's use

It's the customer who stands to gain the most from computer automation of the investment industry, say officials in the business.

Robin Thomson, office manager for Richardson Greenshields Canada Ltd.'s Sudbury office, says computers are increasing the yield potential of client portfolios by dramatically speeding up individual transactions.

"It's just phenomenal," he says, referring to the time-savings.

The computer system being utilized by Richardson Greenshields (similar systems are used by other investment firms) has reduced the amount of time it takes to enter and receive confirmation of a transaction from 15 to 20 minutes to a few seconds.

"It's sped up the process immensely," notes Barbara Giommi, a broker with the Sudbury office. "There were times, when the market was really moving, that it would be a half a day before we received confirmation on an order."

The computer system in Sudbury is linked to Richardson Greenshields' desk on the floor of the Toronto Stock Exchange, where traders carry out the transactions.

If an order is entered at the market price, the client is guarantied that the transaction will go through at either the bid or asking price. If an open order is placed, brokers can track by computer the price of the vehicle and any related transactions.

Giommi is one of several investment brokers at the Sudbury branch who are able to monitor the happenings on Bay Street by personal computer.

Giommi can not only monitor the performance of stocks and of such investment vehicles as futures, options and mutual funds, but she can also enter orders for such items as guarantied investment certificates and treasury bills, maintain client files and access resource files on traded companies. The latter feature saves her the time it used to take to read corporate reports and other volumes of business information.

There are additional computer programs which enable brokers to track the performance of an individual investment vehicle and produce a printout or chart illustrating the vehicle's performance.

However, not all of the investment brokers at the Sudbury investment firm use the computer system. Richardson Greenshields offers to lease the equipment to each of its brokers at a subsidized rate.

"It's relatively inexpensive for them (the brokers)," comments Thomson, "but there is a lot of learning and follow-up involved for the brokers."

Because of the amount of time that is required to enter data into the system, Thomson says some brokers are waiting for their client roster to reach a level which merits using some of the computer programs.

But while some brokers are slow to embrace the computer system, Richardson Greenshields' clients have given it the thumbs-up sign, according to Thomson.

"The clients who are using it really like it because they are able to get a printout and see what type of yield they're getting from their investment," he explains. "They're able to see at glance where they are in terms of asset allocation."

With different programs the computers can also be utilized to plot retirement programs for clients.

"We find out where they want to be in 20 or 25 years, and we're able to determine what their net worth will be in real dollars at that time," Thomson explains. "With the computer we're able to extrapolate the data and get a better idea of what's going to happen."

Thomson says the computer system could eventually connect to such off-shore stock markets as Tokyo. The connection - which is not favored by the TSE because of the potential for the exchange to lose a cut of the transaction fees - is an alternative to the possible extension of the Toronto exchange to 24-hour service.

Computers could also play an increased role if the exchange does operate on a 24-hour basis. Thomson says portable computers would enable brokers to access the market at any time of the day.

"If they go to a 24-hour market, brokers will almost have to have a computer," he states.

PHOTO : Barbara Giommi is one of several investment brokers at the Sudbury branch of Richardson Greenshields who are able to monitor the happenings on Bay Street by personal computer.
COPYRIGHT 1991 Laurentian Business Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:computer automation of the investment industry
Publication:Northern Ontario Business
Date:Aug 1, 1991
Words:693
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