Brokerage Services

Challenge During the past year Waterhouse Securities, the 4th largest discount brokerage in the U.S., started a new correspondent clearing division--National Investor Services Corp. (NISC), to supplement its discount brokerage business. To make a difference in such a competitive marketplace, the firm needed a partner that could provide comprehensive, leading-edge brokerage processing applications--supported by responsive, reliable systems and service.

Solution Waterhouse, an ADP client for 10 years, and its new NISC affiliate knew exactly where to turn for a one-stop solution. ADP's Brokerage Services team upgraded workstations in 100 branch offices to Power Partner, a state-of-the-art market information system. ADP's technology now enables Waterhouse and NISC to access high performance networks for trade executions, provide customers Internet access to their accounts, and quickly fulfill requests for mutual fund information through ADP's Prospectus Fulfillment service.

ADP's second largest business, Brokerage Services, contributes over 20% of ADP's overall revenues. Brokerage Services is a leading provider of securities processing, real-time market information and investor communications services.

"When we needed new innovations to maintain our competitive edge, ADP stepped up to the plate with the right technology, the solutions, and high quality service to help us meet the needs of our 750,000 clients. ADP has been key to our growth as a nationally recognized leader in our industry."

ADP is the largest provider of securities processing services in North America. This year we processed approximately 20% of the retail equity transactions in the United States and Canada, handling an average of over 475,000 trades per day. We also added Legg Mason Wood Walker Incorporated as a processing client. In the market information sector, we support more than 97,000 desktops in over 1,600 firms worldwide.

ADP Investor Communications Services (ICS) is the largest processor and provider of shareholder communications services, and serves more than 12,000 publicly traded companies on behalf of more than 800 brokerage firms and banks and 400 mutual fund families. During '97, ICS processed over 285 million mailings.

In addition, ICS received and tabulated shareholder ballots that represented over 155 billion shares.

ICS introduced ADP Global Proxy Services which operates in 50 countries and aims to be the global processing standard.

While handling these increased volumes, ICS received ISO 9002 certification, recognizing our superior level of quality assurance.

Brokerage Services continues to provide quality, highly integrated products supported by reliable service, as indicated by our new products and enhancements.

This year, we introduced BPS Advantage, a client/server-based relational database that allows our brokerage clients to easily access real-time customer information, such as account holdings and transactions, and customize and distribute data within their firms.

Left: Claudia Holcombe (left), Director of Shareowner Services, AT&T, with Robert Kalenka (center), Vice President Production Operations and Mary Ann Butera (right), Vice President Sales, ADP ICS. ICS's extensive capacity and sophisticated systems support an ongoing project with AT&T which eliminates duplicate shareowner mailings to about 10% of street name shareowners and provides a cost effective distribution process which allows AT&T to reach its more than 3 million shareowners. Left: J.W. Charles Financial Services, Inc., one of the largest broker/dealers in Southern Florida, and ADP work together to facilitate the firm's future growth. John C. Sease, Jr., ADP Account Manager (right), helps the firm's management team, Thomas Terpko, Vice President Management Information Services (left), and Greg Glaser, Executive Vice President and Treasurer (center), to maximize the unique benefits derived from ADP's integrated product offerings.

ADP's Power Partner, which provides advanced market information, has become the product of choice for retail brokers. This powerful system delivers real-time information, analytics and custom charting for equity, options, and futures traded on all North American exchanges and over 100 foreign exchanges. We also launched K2, a state-of-the-art market information and analytical product, designed for traders and money managers in the institutional marketplace. ADP developed K2 with the goal of integrating all of our institutional products on a common platform. This sets the stage for bringing together front-, middle-, and back-office services at the desktop for integrated processing. Many of our investments also are helping our clients to expand their internal information management capabilities.

Below: Peter A. Wigger (left), Chairman and CEO, and Joseph N. Barra (right), President and COO of National Investor Services Corp., along with John Chapel (center right), President, and Frank Conti (center left), Executive Vice President, of Waterhouse Securities, Inc., discuss with ADP's Mark J. Coviello (second from left), Senior Director Account Management, and Marianne C. Brown (second from right), Senior Vice President of Service Delivery, how ADP can provide the technology and solutions to help Waterhouse Securities, Inc. and its affiliate NISC maintain a competitive edge.

Starting with Deutsche Bank AG's New York branch, our new Impact transaction processing product will help to clear fixed income securities, track instrument positions, produce confirmations and settle transactions more effectively than ever.

Wilco Systems is a rapidly growing ADP subsidiary, which offers international trading and settlement systems. Wilco recently introduced Gloss HV which is a multi-instrument, multi-currency, trading, settlement and accounting system. In December '96, Bankers Trust signed a global license agreement to use Wilco's Gloss HV trading and settlement system. Wilco continues to make gains in the global market with several more large prospects in the offing.