Brokerage Capacity Management Best Practices

June 28, 2006


New York, NY, USA June 28, 2006

US retail brokerage firms are poised to handle increased trading volumes thanks to redesigned trading systems.

The first quarter of 2006 saw US retail trading volumes finally surpass 2000 levels. This comeback was six years in the making, but retail brokerage firms were ready for this increase in trading activity, because they have spent the last three to four years streamlining their IT infrastructures in order to have a more flexible, scalable, and cost-effective system. However, as trading volumes increase, capacity is again a concern of the major retail brokerage firms.

In a new report, , Celent provides insight into what leading brokerage firms and brokerage service firms are doing to ensure that they have sufficient capacity at an acceptable price. The report examines how firms have architected systems that maximize flexibility, adaptability, speed to market, and reliability, all while being extremely cost-effective.

"Brokerage firms learned their lesson after the crash of 2000," says Lauren Bender, Manager of Celent's Retail Securities & Investments group and author of the report. "They cannot afford to build and maintain bloated systems that only break even at high trading volumes, they must build for flexibility so that as trading volumes change, they can scale up or down quickly and easily in response."

Companies covered include ADP, BEA, Charles Schwab, E*TRADE, IBM, ICICI Bank, Merrill Lynch, and TD Ameritrade.

The 34-page report contains 11 charts. A table of contents is available online.

Members of Celent's Retail Securities & Investments research services can download the report electronically by clicking on the icon to the left. Non-members should contact for more information.  

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
Tel: +1 212 345 1366

Europe (London)
Chris Williams
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
Tel.: +81 3 3500 3023

Table of Contents

New York, NY, USA June 28, 2006

Executive Summary 3
Retail Brokers Make a Comeback 5
Capacity Is Back in the Spotlight 10
A Look at Technology 13
Capacity Management Best Practices 17
Firm-Level Best Practices that Support Capacity Management 26
Conclusion 32
Objectivity & Methodology 33

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