BlueStone Capital has launched a new online trading service, which it is calling Trade.com, geared toward high-net worth individuals. The New York-based firm is in negotiations with several global financial institutions to market the system to their retail clients. Kamal Mustafa, BlueStone's Chairman and CEO, says
his firm has just signed agreements with three financial institutions-one in Canada, one in Europe and one in the Caribbean Islands, who plan to use BlueStone's system. These partners will pay BlueStone $250-$500 per account absorbed, and he notes that among the three, the firm expects to absorb 250,000 accounts. Mustafa would not disclose the partners.
Although the system is geared toward high-net worth investors, any retail investor can log on and open an account. Clients can trade U.S. equities and bonds, as well as some international equities and bonds. Through additional global partnerships, the goal is to allow users to trade any security in any currency. "Customers will have access to the exchanges to which our co-branding partners have access," Mustafa says. This will include exchanges in Europe, Asia, North America and South America, with the possibility of expansion to Africa and Australia. Mustafa would not disclose the specific exchanges.
BlueStone has been building the system for two years, and Mustafa explains that "the goal was to develop a truly global system. We wanted the capabilities to do both domestic and international equities and bonds, currencies, and other assets that high-net worth investors want to buy. On top of that we wanted to add two other key features-ease of use and service." Each BlueStone client is assigned to a team of six support staff-one senior broker, one junior broker, one technician, a bond specialist and general support staff that speak different languages. An investor has three ways of contacting a client with the firm's instant mail system. The investor can either put in a request or question and within a minute a window appears with an answer from a broker. Or the user can press another button where it can enter a phone number and in a short time a broker will call. Lastly, the investor is given the broker's phone number and cell phone number so he or she can be reached at any time.
BlueStone also is in negotiations with seven other financial institutions and has started talks with 27 others, all of which Mustafa declined to name. The institutions with whom BlueStone partners will handle the local clearing, while BlueStone will handle the central clearing on a global and U.S. basis. On its first day live, Sept 1, the system received 3,000 hits and 56,000 page views.