The Investment Industry :: essays research papers

The Investment fabrication     The coronation manufacturing is composed of a wide of the mark variety of firms. Themain players include nonparasitic full line securities firm firms, investment banksubsidiaries of rent banks, and disregard brokers. Independent full linebrokerage firms offer a wide range of services, including underwriting, tradingof stocks, advice and research. In essence, the full service brokeragesubsidiaries of chartered banks offer the same services, however, banksbrokerage firms may fuddle a bigger pre-established clientele. Finally, thediscount brokers are basic stock brokers that perform trades for clients who do non want investment advice. Usually, this service is targeted toward thesophisticated investor who does his/her own research to come up minimal commissionfees.     Banks entered the investment industry in 1987, whereby they took overfull-service brokerages, introduced unwashed funds to the banking indu stry andbecame part of discount brokering. From this time on, chartered banks haveexpanded their dominance in the industry by acquiring paint players in theindustry or branching off into full brokerage services. For example, thebrokerage firms for CIBC, Royal Bank, Toronto normal Bank, Bank of Nova Scotiaand Bank of Montreal are woodwind Gundy, RBC Dominion, Evergreen, Scotia McLeod andNesbitt Burns respectively. In addition, the aforementioned chartered banks haveto a fault branched into the discount brokerage sector.     As of December 1994, the Securities Industry as a whole included 158firms, directly employs over 24,000 people, has operating revenue of $5.1Billion and operating profit of $1.2 Billion (Appendix A). Within this industrythe largest firms graded by revenue are RBC Dominion Securities ($1 Billion), midland Walwyn ($480 million), Burns Fry ($416 million) and Nesbitt Thomson($335 million) (Appendix B). It is evident that the industry is highly concentrated in a small number of companies. The top 4 leaders in the industryaccounted for 44% of revenue, while the top 8 was 51%.     Industry information from 1993 displays further segregation, betweenretail, institutional and integrated firms. Integrated retail-institutionalizedfirms (RBC Dominion Securities, Scotia McLeod, Nesbitt Thomson, Wood Gundy) madeup 66% of the industrys revenue, while strictly institutional firms (FirstMarathon Securities, Gordon Capital Corp. and Loewer Ondaatje McCutcheon Ltd.)made up 21% and Retail firms (Green profligate Investor Services Inc.), 15% (AppendixC). The following analysis will outline the investment dealers industry,specifically the life cycle, critical success factor, strengths, weaknesses,target markets and profitability.Life pedal     The demand for investment financial services is expanding. This becomesevident by examining the bonny increase in revenue which has occurred over the1990-199 4, 5 year span. This amounts to a 114% increase in revenue, ($2.4Billion and $5.13 Billion), (Appendix A). An additional indication of growth inthe investment industry is the fact that the number of firms in the industry has