ADP, Quotron Fight For 420 Brokers At Morgan Keegan

Memphis, Tenn.-based Morgan Keegan Inc. has narrowed its search for a quote vendor to supply market data to its 420 retail brokers, installing pilots of ADP's FS Partner for Windows and Quotron's Advantage AE Version 2 Windows workstation-based systems. But as a decision draws near, the firm is expanding its pilot of Quotron's AE service to 22 users, leaving the ADP pilot at 9.

According to Wayne Henderson, director of information systems at the firm, Morgan Keegan is asking Quotron to deliver data over the firm's own wide area network to two branches, one at the Memphis headquarters, the second in East Memphis. A third pilot in Birmingham, Ala., is scheduled for next month.

"To date, I'd give the system a B if I were grading it," says Henderson. "The quotes and monitor are holding fine, although we're losing intermittent news."

"We experimented with ADP in one branch and the pilot went fine," Henderson says. "But Quotron demonstrated better portfolio management tools: their Broker's Notebook was simply more powerful than ADP's PowerBroker, although I understand ADP's working diligently to change that."

The system that eventually wins will replace Quotron's Q1000 service and Shark Information Services Inc.'s Windows-based service. Quotron currently supports 355 broker positions, while Shark covers another 65 traders and institutional sales staff.

The firm's quest for a new retail system is running behind schedule. Keegan's Shark contract expired last August, while its Quotron contract is due to lapse in January. Earlier this year, firm officials said they hoped to have a decision made by mid- summer, in advance of a 1993 rollout (IMD, May 26).

The firm has, however, made significant strides toward installing a new proprietary 56 kilobit/second wide area network linking its 22 branch offices, sources say. The terrestrial WAN carries both voice and data, and is centered at the firm's Memphis headquarters.

The list of losing vendors is long. In addition to finalists ADP and Quotron, Keegan had considered a wide range of quote systems, including those provided by Shark, S&P Comstock/A-T Financial Systems Inc., StockMate Financial Systems Inc., ILX Systems Inc. and American Real-Time Services Inc.

Details as to why each of these vendors was rejected remain unclear. However, Morgan Keegan has been concerned from the beginning that the vendor it ultimately selects have a solid and sizable presence in the marketplace and be able to supply adequate support. It also indicated it would prefer to select a single vendor to provide market data services to all its users.

In reference to Quotron's presence, Henderson says: "They're still the second biggest vendor in the market. And this may be the product that stops the fallout. Two months ago, I would say they didn't have anything that could really compete. But AE Version 2 is a superior system."

Insofar as all of the large national brokerage accounts have already been signed -- and most of the biggest regionals have also made their decisions -- the Keegan race is being hotly contested.

Meanwhile, sources say that Quotron has taken an unusual approach to Morgan Keegan. Under normal circumstances, Quotron's existing customers -- such as Keegan -- are assigned to a so- called relationship management team responsible for supporting the customer during the term of the contract and securing the renewal agreement (IMD, Sept. 14).

In Keegan's case, however, Quotron has assigned the firm to a team normally tasked with winning new business, sources say. Nor has ADP been neglecting the broker, according to sources, paying its own high-level visits.

In selecting the two vendors' Windows-based services, Keegan opted against the X terminals running applications on a UNIX/X Windows server that it was considering earlier this year. On whatever platform it selects, Keegan is seeking to run word processing, a distributed broker-portfolio management system, spreadsheets and graphics.

The winning system will have to provide 3270-emulation access to proprietary client and security information resident on a Tandem Computer Inc. mainframe in Memphis. The Tandem runs SunGard Financial Systems Inc.'s Phase3 back office software. Brokers relay sales to wire operators, who input the data via terminals linked to the mainframe.

Price will likely be a key factor in the decision Keegan makes. It now pays Quotron about $219 per terminal per month, and Shark about $253 monthly per terminal. At going market data rates, Keegan can expect to see substantial savings off its current bill.