Brokerage firms that are looking for ways to attract and retain their most profitable active traders can now offer them real-time market data and dynamic updates to their portfolios and watch lists at a modest cost, while reinforcing their own brand through private labeling the service from Stockgroup.

The company combines a unique blend of market information, community, and technological infrastructure. Among active traders, it is best known for StockHouse.com, an online message board that attracts 800,000 unique users per month who consume 88 million page views on a monthly basis, looking for analytical tools, screens, stock tips, market information, and a chance to argue over the best prospects in the marketplace. Through StockHouse, the parent company stays in close touch with active retail traders. It has used that expertise to build new tools that brokerage firms can deploy to attract and retain their President Club level clients.

“Our focus has been on the retail investor, although with our new products we are now selling through institutions,” said Marcus New, president and CEO. Stockgroup has recently launched StockStream, a streaming portfolio management application that allows users to view their favorite online content while monitoring their stocks, and collaborate with their advisors in real-time. Stockgroup’s greatest achievement has been to develop a way to deliver this information in a value-priced package that brokerage firms can subscribe to on behalf of their most profitable customers.

Products like ThomsonONE or Townsend Analytics’ RealTick provide news, data and analytics, but at a price that only professional and semi-professional traders can afford, said New.

“Individual investors who trade more than three times a month – estimated at six million in North America – are usually the highest value customers for a brokerage, but this is a group that doesn’t want to pay big dollars for RealTick. They use advisors, but they also want access to more sophisticated tools,” he said.

Introduced in April, StockStream has attracted the attention of several large brokerage firms; Stockgroup has tens of thousands of seats in the pipeline, said New.

“Brokerages want to purchase it and get it onto the screens of their best customers. In the past they have been unable to offer real-time streaming data because the price was too high, but now we have stripped out the big news costs and we can deliver it over the Internet. If clients have access to real-time data they can trade more,” he said.

StockStream also offers co-browsing so an advisor can share a screen remotely with a client and use a cursor to point to the information he is talking about.  New expects the wealth of information will prove useful in client retention. In the rising markets of 2006, clients are reading about large market gains, and then they look at their own monthly statements and wonder why they are up only 8 percent for the year.

“With this technology, the broker can communicate with his client more efficiently about what is going on,” New said. The application has a full RSS feed so the brokerage can send out morning notes or research to the clients who qualify for StockStream.

Brokers can also offer password-protected message boards for their key clients where they can discuss the market and share their recommendations efficiently. New said that message boards provide a valuable service for small- and mid-cap stocks, which often aren’t followed by any analysts, because they create a forum where traders and industry watchers can post information.

By stripping out some of the most expensive components of the professional tools, such as news, Stockgroup can deliver real-time streaming prices to brokerage firms for about $20 a month. The brokers can, in turn, deliver the information to their clients on a brokerage-branded feed.

“Now, all of a sudden the brokerage firm can use this to put its brand on the desktops of its best customers every day. Brokerages work hard to build brand equity – they deliver statements once a month and often produce a newsletter – but they still have very little contact with their customers,” New said.

The next generation of the platform will include customer intelligence, so the advisor can see information about a client, including holdings at other brokerage firms (the average active retail customer has accounts at three firms) that the client has agreed to share with his broker. This provides the broker an opportunity to look for investment ideas that might attract those externally held funds to his own firm.

“This is a great time on a number of fronts,” concluded New. “People are increasingly interested in the market, so we are seeing more activity. And they are more sophisticated; they want to be more informed. They don’t necessarily want to make the calls or do the financial planning, but they want to understand, and they want the brokerage to think they are important.”

With the commoditization of trading, and the reduction in commissions, an advisor needs a lot more clients to make the same money he did 10 years ago. His challenge is to bring in more clients, keep more clients, and provide a high level of service.

“We are creating tools to let the advisor build a strong relationship, deliver more value, and get a larger wallet share.”

www.stockgroup.com