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Introducing Broker Technology Focus: Service Providers and Technology Vendors to Fully Disclosed Firms

Introducing Broker Technology Focus: Service Providers and Technology Vendors to Fully Disclosed Firms

The fully disclosed retail brokerage firm must have a plan to manage its technology vendors and service providers in a way that complements its business.
By Doug Dannemiller

Boston, MA, March 3, 2010 – A new report from Aite Group, LLC reviews the needs of fully disclosed retail introducing brokerage firms and categorizes these needs into nine basic functionalities. The second in a two-part series focused on introducing broker technologies (see Introducing Broker Technology Focus: Advisor and Executive Perspectives at Fully Disclosed Firms, February 2010), the report profiles 16 service providers - clearing firms, front-office services firms, and middle- and back-office services firms - that serve this set, and discusses key functions performed by these brokerage firms.

The brokerage technology processing landscape covers the major functional elements a brokerage firm must perform to operate. Brokerage firms need to manage three complex entities - the front, middle, and back office - in an efficient and regulatory-compliant manner. While trying to survive in a highly competitive marketplace, retail brokerage firms also face the difficult challenge of creating an array of services to meet their processing needs. Those firms that have a plan to manage their technology vendors and service providers in a way that complements their corporate strategy and enhances their differentiation points will surely come out ahead in this competitive space.

Doug Dannemiller, senior analyst with Aite Group and author of this report, says, "While the clearing firm should be the cornerstone of fully disclosed retail brokerage firms' technology and service architecture, additional technology vendors may be required to supplement any missing pieces. For a guide to best practices in clearing-firm selection, see Aite Group’s report, Best Practices for U.S. Broker/Dealers: Evaluating Fully Disclosed Clearing Firms, April 2009."

This 35-page Impact Report contains 17 figures and five tables. Clients of Aite Group's Wealth Management service can download the report.