April 04, 2001, 9:12 AM — In the mid-1990s, data-center managers at Fidelity Investments in Boston were receiving alerts of system errors on their personal pagers. That application made them think, What if we could alert retail stock-trading customers via pager when a stock fell or rose to a certain level?
"It was a great idea, but there wasn't enough technology to support it back then," said Joseph Ferra, senior vice president at Fidelity's online brokerage division.
But wireless technology, encryption and network coverage evolved, and Fidelity rolled out wireless services for retail customers in October 1998. Two years later, Fidelity boasts 100,000 retail customers - 2.5% of its online total - using all sorts of handheld devices to monitor stock and 401(k) portfolios, receive alerts and respond with actual orders to buy or sell, according to Ferra.
Today, analysts say they consider Fidelity a leader among approximately 50 online brokerages that provide wireless retail services.
Wireless retail-trading options have grown wildly in the past two years, and brokerages will soon extend the services in many ways, such as to institutional investors managing large portfolios. They're also likely to add other types of content to their portals, brokers and analysts said.
But not everyone sees all of this investment as wise. None of the brokerages offering wireless services described here would discuss whether they have seen a return on their investment. And Meridien Research Inc. in Newton, Mass., projects that brokerages might get no more than 5% of online trading over wireless.
"The rich, the young and the reckless are the feeder syystem for expanded mobile financial services," wrote Meridien analyst Randi Purchia in a recent report.