Unity steps into unknown with online share trading

By DITA DE BONI

After stirring the banking world with a financial services website in 1998, the Manchester Unity friendly society is taking another step into the electronic services void.

On Sunday, Unity launches its online share trading service - giving moneyed browsers the chance to put financial information gleaned from the site into action.

Online share trading - including real time quotes, trading, charting and the ability to "mock up" an investment portfolio - will add to existing financial services information currently offered by a range of institutions on the site.

Unity Financial Services' chief executive, Brian Howard-Clarke, says the aim of adding online sharebroking to the site was to "bring together, on the internet, information and education relative to finances, simple planning tools and product offerings, with the facilities to complete share-broking transactions."

Unity - the e-services arm of 22,000-member Manchester Unity - says it will provide the front end of the service, with brokers DF Mainland providing the back end.

Mr Howard-Clarke says the company conceived the idea after foreseeing a decline in face-to-face brokering as electronic alternatives to high fees and commissions emerged.

After a one-off launch price of $25, Unity will charge a flat fee per online trade of $29.50.

"We saw an opportunity to invent something through the Web that would reduce transaction costs, a direction the banking world is firmly moving towards," says Mr Howard-Clarke.

Unity currently makes its revenue from the commission on insurance sites and a "trailage fee" from investment product displays.

It aims to be profitable in three years' time, won't be revealing sales figures, and hints at a listing some time in the future.

While conceding the portfolio will "definitely" be copied - and probably chased by the Rupert Murdoch/Japan-based Softbank/Craig Heatley trio behind eVentures - Unity has the "first mover advantage," he says.

The eVentures team currently carries online loans and insurance, and says it will list on the stock exchange in the next few years.

But despite the threat from the the big boys, Mr Howard-Clarke seems mostly unconcerned.

"The reason we positioned ourselves as we did is because we saw that manufacturers [of financial products] would probably offer services direct themselves, but couldn't offer impartial advice."

"[In] the UK, the AXA site carries competitive products but we didn't believe [a site like that could be] truly impartial, and brokers themselves could offer similar things, but would probably not have the capital to invest in setting up this type of service."

He says overseas competitors would have great difficulty overcoming this country's compliance regime. Another plus is Unity's 150 years of operation in New Zealand.

"I do believe people take a degree of comfort [from our history] and feel a certain amount of trust and credibility that we are not a fly-by-night operation."

In the next three months Unity also hopes to introduce "voiceover internet protocol and collaborative browsing," allowing users to speak to a call centre agent over the site using a telephone line, and the agent will be able to guide a user's mouse while providing instruction.

Mr Howard-Clarke says he is ready for the electronic paradigm shift currently sweeping the financial world.

"I think my background and understanding is really a plus, because one of the problems in [this industry] is that senior executives in the financial services sector are often technophobes, whereas I know the possibilities and I'm not put off by people using tech-speak."

The online trading launch is fronted by a two-year-old called Callum, a marketing strategy Mr Howard-Clarke says represents how the site is "easy to use."

"It's also representative of the future. We didn't launch this site to be a short-term money-maker. It's about long-term repositioning of Manchester Unity."