Wall Street & Technology is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Trading Technology

12:36 PM
Connect Directly

VIFI To Offer Online Trading Option to Small Brokerages

New product would give smaller financial institutions the ability to provide their customers with a fully branded online and onsite brokerage function.

Virtual Financial (VIFI) is planning to launch the test phase of its new InternetBroker product.

This product would give smaller financial institutions the ability to provide their customers with a fully branded online and onsite brokerage function-in the next few weeks, with intentions for a general release this fall.

VIFI's InternetBroker will give the customers of smaller financial institutions the ability to trade stocks, bonds, mutual funds and options, while also providing portfolio tracking, research and news capabilities, stock quotes, company information, charting and earnings calendars.

VIFI President Mike Winter feels that his company's ability to provide a fully branded site for any size financial institution is filling a large market niche. "Think of a Web site, it's a piece of marketing real estate. Our technology allows us to deliver a unique look and feel for every institution, regardless of where the buttons are placed or what kind of reports you get from the system," says Winter. Mark Kilgore, vice president of Information Technology for City and County Credit Union in St. Paul, Minnesota-which will be testing the InternetBroker in the next few weeks-says that at an estimated value of $225 million, his institution did not have the resources to develop a brokerage capability in-house. He says while shopping around he was put off by products that diluted the credit union's brand-products that took the credit union's customer elsewhere to trade. "We kept facing the dilution of our whole market brand, and we just didn't like that. We really wanted something where they weren't leaving our site."

When customers leave the site of a financial institution to satisfy their trading needs they are, more and more, being wooed to stay at their broker's site with offers of checking accounts and credit cards-services once exclusive to the financial institution. "I think that long term what we see is this infiltration coming from the brokerage houses into our customer base, and it was quite evident to us that this was something we didn't want," adds Kilgore.

Trades done over VIFI's InternetBroker will be handled by Unified Management Corp. (UMC) and U.S. Clearing. From the $14.95 commission cost that a trade will carry, a few dollars will go to the financial institution and the rest to UMC and U.S. Clearing. VIFI is paid an implementation fee for InternetBroker by financial institutions and then a monthly charge based on the number of customers who use the system.

Winter stresses that an additional advantage to the InternetBroker system is the fusion it creates between "banking and brokerage." With that marriage, the transmission of funds between one's savings account and one's trading account becomes very easy. Kilgore says he understands the importance of such an advantage to his credit union. "We're going to be putting in some higher-yielding type asset-management accounts to have these funds swept back, when securities are sold, into the credit union. We're hopeful that we are actually going to receive some deposits that we wouldn't have received otherwise."

Kilgore adds, "Everybody else wants us to go to their site, to have our members go there, and that's what I think makes this pretty unique: They're not going to do that."

Register for Wall Street & Technology Newsletters
Exclusive: Inside the GETCO Execution Services Trading Floor
Exclusive: Inside the GETCO Execution Services Trading Floor
Advanced Trading takes you on an exclusive tour of the New York trading floor of GETCO Execution Services, the solutions arm of GETCO.