Limited Access

Brokers have been waiting a long time to use some of the basic Internet tools most businesspeople employ every day. The access issue has troubled the industry for the past several years, as firm management struggles with how to control the information brokers receive and send to clients.Reps generally find the wait frustrating. An A.G. Edwards rep in the Southeast complains that the firm doesn't have

Brokers have been waiting a long time to use some of the basic Internet tools most businesspeople employ every day. The access issue has troubled the industry for the past several years, as firm management struggles with how to control the information brokers receive and send to clients.

Reps generally find the wait frustrating. An A.G. Edwards rep in the Southeast complains that the firm doesn't have external e-mail capability. Clients can contact him through the firm's Web site, but he can't respond--at least officially. "My clients know the rules," the broker says. "I don't write anything back."

It's a far cry from instant messaging, but at least hard-to-reach clients can tell him when they're available. "Clients will shoot me a message saying, 'I'll be back in town Thursday. I'll call you then.'" Sometimes he gets the message by the next business day. "The wire operator puts it in my box."

But improvements are in the pipeline at A.G. Edwards. The rep anticipates full-blown e-mail capability shortly. When the new workstations roll out in 2000, he'll have his own financial consultant home page, better client account access and other online tools. "I'm excited," he says.

One of the features of A.G. Edwards' new system is an electronic questionnaire that clients fill out and e-mail back. Then the reps can instantly plug into financial planning programs without reformatting the data. Reps will also be able to view what clients see when they access their accounts online. "If a client is looking at their account at home and they have a question, I'll be able to look at the exact screen they are," the broker says.

Morgan Stanley Dean Witter began rolling out a similar program in May. Reps will have access to the firm's client Web site for the first time. "Financial advisers can view exactly what their clients are viewing by logging onto the site with their FA username and password," says Sandra Motusesky, MSDW first vice president and manager of interactive marketing. Until now, MSDW reps have not had a direct link to the Internet.

Additionally, MSDW is beginning an external e-mail program that will route a copy of each incoming and outgoing message to the branch manager for post-review, Motusesky says. Branch managers will perform key word searches daily to look for offending words or phrases.

"We truly believe that e-mail will revolutionize the way our FAs do business," Motusesky says. "E-mail is such a quick way to keep your clients informed and let them know you are out there thinking about their best interests. It's also a great way to follow up on current prospects, without having the invasive approach of a phone call."

Everen Securities has a similar e-mail program being rolled out on a limited basis this year. A sophisticated surveillance system will review messages' content, quarantine problem messages and alert the branch manager, says Gerald Baker, Everen compliance director.

Seeking Efficient CommunicationReps bemoan firms' foot-dragging on technology since they know Internet tools can save time in managing client communications. Yet even reps with electronic access to clients say their computer systems aren't smooth.

For example, Salomon Smith Barney brokers can communicate electronically with clients who have paid a premium for Smith Barney Access, an online service. The firm screens all such communication. One SSB broker on the East Coast wishes the service were available to a broader base of clients. "If I had access to all clients via e-mail, it would save lots of phone time," she says, adding that most clients who have e-mail don't feel the need to sign up for Smith Barney Access.

Steven Epstein, a PaineWebber rep in Hemet, Calif., has developed his own electronic communication method. He has been collecting e-mail addresses from clients and prospects for the past six months. He e-mails about 40 clients and prospects a week, sending them firm investment ideas and research reports. What might have taken him 45 minutes to prepare via regular mail, now entails a mere five minutes of copying and pasting text--even with out-of-date, non-Windows technology.

"Our system right now is primitive," Epstein says. "It goes through the PaineWebber server and the system is slow."

While only a few people have asked to be taken off Epstein's weekly e-mail list, he says his prospecting has resulted in sales. "Our TFI department mentioned that we were publishing some interesting CDs on the PW Web site," he says. "I e-mailed that address to my clients. One client called me up and ordered one of the CDs on the Web site."

Holding Back on Self-PromotionWhat brokers want most from the Internet is the ability to generate more business and attract attention. The East Coast SSB rep says it's ironic that more firms don't allow broker home pages. "Clients have access to our disciplinary histories online, but we aren't allowed to market ourselves," she says. "It would be interesting to see if it would be advantageous to my business to have my picture, credentials and experience on a Web page."

A.G. Edwards, Prudential Securities and MSDW are planning to have rep Web sites. Prudential has been testing home pages with several hundred reps and intends to roll them out to its entire broker force by year-end. The public, however, won't have access to the sites, which will contain a photo, audio clip, investment newsletter and personal message postings. They will only be available through Prudential Online, the firm's client-only site, according to Murali Balasubramanian, first vice president and manager of strategic client initiatives.

MSDW is using a similar approach, Motusesky says. Its advisers will have sites through its private ClientServ, under a section titled "Your Financial Advisor." The pages won't attract prospects since they will be accessible only to current clients, she says.

However, MSDW is beefing up its public Web site with hopes that it will become a significant source of referrals. The firm intends to give away some freebies including financial planning tools to prospects willing to register and be contacted by a broker, Motusesky says. But reps will have to contact those leads via traditional methods, not e-mail.

"You have to be very careful with prospecting via the Web," Motusesky says. "Our e-mail policy states that the first contact with a prospect cannot be through an e-mail. E-mail can only be used as a second point of contact."

Like many of their clients, most brokers find the expanse of information available on the Internet irresistible--even though their firms may not provide them with online access at their workstations.

An A.G. Edwards rep in the Southeast has his own Internet hookup in the office through his laptop computer, since his firm does not yet provide direct access. A Prudential Securities branch manager in California estimates that half the reps in his office have Internet connections on personal computers they keep at work.

"It's getting pretty ubiquitous," he says. Firms have been slow to allow direct access to the Internet for security reasons, reluctant to expose their proprietary networks to outside hackers or viruses, the BOM says.

Nevertheless, brokers are finding that many Internet sites are helpful to their businesses. Independent reps especially appreciate the research they get online. Andy Varoshiotis, an independent broker in Cypress, Greece, who does business through Rochester, New York-based Wall Street Financial Group uses www.multex.com to access research he wouldn't normally have.

"[The multex.com] Web site lists the research of all the major investment banks in the United States," Varoshiotis says. "I can order research reports from firms such as Salomon Smith Barney and Hambrecht & Quist on companies I'm following." The research on demand usually costs around $4 a report, he says.

Another independent broker with Wall Street Financial Group, Phil Siegel of Dallas, says the Web makes independent brokers more competitive. "Whatever my concerns were about not being able to keep up with research were not true," Siegel says. "I found all the research I could on the Internet for free." He uses www.bloomberg.com and keeps tabs on sites that his clients may find interesting. "I use it to its fullest," Siegel says.

The A.G. Edwards broker has found the following sites helpful: www.thestreet.com, finance.yahoo.com, www.rapidresearch.com and www.convertbond.com. He also looks up Federal Reserve Chairman Alan Greenspan's speeches as they happen, as well as minutes of the Federal Reserve Board's meetings on www.bog.frb.fed.us.

The A.G. Edwards rep has other favorites including Warren Buffet's www.berkshirehathaway.com. He reads the famed investor's annual report on Saturday when it comes out, which gives him a jump on the media coverage. He says the financial media sometimes blows snippets of Buffet's report out of proportion. Reading the whole thing himself helps him give better advice to clients who are confounded by conflicting news reports.

"I get paid to have an opinion," he says. "When people ask me a question, I try to have information to back it up."

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