This is Bloomberg Business Week with Carol Messer and Tim Steneveek on Bloomberg Radio.
Let's talk a little fintech here. The company, Yeah, the company today is broad Ridge. It's a public traded company. The tickers b are you put that into the Bloomberg terminal. The company's got twenty two point six billion dollars in market CAPAIN stock is up forty three percent year today. Joining us today, Tim Goki, chief executive officer of Broadridge. He joins us via zoom from New York City, and I know the company held today an investor day, so
we'd like to hear what's going on there. Tim, Thanks for much for joining us here. Tell our listeners, our viewers just give us kind of the thirty second overview what you guys do at Broadridge.
Yeah, absolutely, thank you. Paul a guest is really great to be with you today. So, as you said, we are a global fintech and we really sit at the intersection of financial services. We power the critical infrastructure that really supports perber governance in North America and around the WORL world, also capital markets and wealth management, and we're sort of the behind the scenes player that makes that possible for many of our clients, who are the largest banks,
broken dealers, asset managers. We have a unique network that really connects all market participants, including all public companies through their broken dealers, to individual and institutional investors, enabling corporate governance, but also supporting capital markets and wealth management.
Tim, as Paul mentioned, you did have an investor day today. Walk us through what you can discuss when it comes to some of the business strategies that you unveiled.
Yeah, it was an exciting day, and I think we talked about that network I just described and how that
has enabled us to build businesses over time. We talked about the consistent results that we've produced ten percent recurring revenue growth over the past ten years, fourteen percent TOM hundred and earnings growth over the last fourteen years, and why we think the next is going to be just as good based on some really significant trends and drivers that we're seeing in the market around the democratization of investing, the digitization communications, and the acceleration of trading, and those
are all areas that we've positioned our company to enable.
Tim describe kind of the services the products that you guys have at Broadbridge. I know you're in communications, you also clear trades. Just kind of let us know how you guys generate revenue.
Yeah, a couple of different areas. So in corporate governance, we provide a twenty four x seven sixty five SaaS platform that takes in investor positions, reconciles them, sends the communications that public companies need to send to all of their investors for boards of directors elections, and then takes back and taglay the results of those, provides end to end vote confirmation, and then provides all of the building and sort of financials behind that, And so we're really
behind the scenes player that facilitates all the boards of directors elections. We also facilitate many of the meetings themselves. Last year we did about twenty five hundred meetings virtually on our platform. And so whenever you get a communication from your broker dealer, either digitally or if you're stually getting it by mail, it's likely that it came through us.
So that's a big part of our business. The other part of our business is providing technology platforms for capital markets firms and wealth management firms, and we really provide the underlying books and records, paying people their dividends, settling trades, clearing trades. So nothing that you would see as a consumer, but very important part of the infrastructure for many of the largest players.
Talk to us about how your company is providing guidance when it comes to the democratization of investing.
Yeah, and that's really you know, that is a multi decade trend where over time we've seen the cost of trading and participating in markets for individual investors continue to get lower, culminating in really zero commission trading, which we have seen now and also new products going all the way back to the invention of mutual funds and ETFs,
but now managed accounts, direct indexing. All of that is drawing more participation, more people participating, and also them holding more individual positions, and we get paid per position because we're communicating with the old one share of Amazon or one hundred that's the position. The number of investors with the percentage of adult age US adults that are owned at least one share has gone from forty nine percent
and years ago to fifty nine percent last year. So we're seeing increased participation also an increase in the number of products that people are holding and so that is really causing companies to want to engage with their retail shareholders more as causing a demand for new tools. That's why we are introducing a lot of digital tools to help wealth management firms facilitate that engagement with you with your clients.
I'm glad you brought up tools because AI tools is in your notes. We've talked so much of Paulay about the AI frenzy here. Talk to us more about what that means when you're talking about AI tools as far as helping your products.
Yeah, we are, and as is everyone. We're investing a lot in AI and we see it helping in a few different ways. So, first of all, you know, generative AI will just be part of every product in the future. It would be table stakes for most companies. And then beyond that, companies that have unique data, we'll be able to really create creative products that help and provide them
in advantage. Earlier this year, we introduced a product called Bond GPT and it allows traders Capital markets traders to ask sophisticated questions about bonds, which ones are available, the structure, details about them, which would be available to look up and use your keyboard to consult different databases and find the information, but that takes time, and so we can take complex queries that might take even experienced trader many minutes to do, provide that back in seconds, and those
kinds of pre trade analytics make the whole process easier for them. That's just one example. We're introducing generative AI really across our products.
Hey, Tim, when I was on the street, we settled our trades T plus seven. Then it became T plus five. Now I think the kids are doing it at T plus one and maybe T plus zero. How does that impact your business? That's got to be a technology on nightmare.
Yeah, it is. So we're currently the market is at T plus two and it is moving in May to T plus one, and so we are working with all of our clients on facilitating that change and helping them do that. There's a whole series of industry testing that's going on even as we speak, and I think that the limits of today's technology make T plus T plus one will be fine. The move T plus zero will
be harder. People are beginning to talk about that. There's also a lot of behavior change that is required because one of the things that happens between today. Between T and T plus two is a lot of interchange between the person that made the trade and all the participants to confirm that it's actually the right trade and that gets allocated to the right account, and now all that will have to happen in sort of half the time.
All right, Well, I was on the floor the New York Soca Change when to crash in eighty seven.
Wow.
We spent weeks trying to match tickets and it was a disaster. I can't imagine what Boy, we needed detech technology back then. Hey, Tim, thanks so much for joining us. Tim Gogie, chief executive officer Broadridge, a fintech company, joining us on Zoom from New York City. Yeah, it was a disaster. I can't remember the numbers, but typically we'd
have mismatched trades. Call it ten thousand just at the end of the day at Paine Webber, you know, on that October day, and then for weeks afterwards, it was you know, if it wasn't ten thousand, it was three hundred thousand. I mean, it went crazy, So, I mean, and it was like that every firm across the street, and you'd spend days running around to Morgan, Stanley, Goldman sach trying to find the other ticket to match, Like, I know I bought three hundred thousand x on here, but I can't find it.
Was that your first job coming out of college where we were.
In a training program and they yanked all the trainees and they turned down to the stock is Chraine a couple days before that the day wow right, yeah, because vimees were just getting so big right in front of that that day and then it was just crazy, and you know, and then I think everybody turned around and said, I think we should probably think about investing in technology.
You know, that might might be our friend. You know, Writing a blue ticket for a buy and a pink ticket for a seal is no way to run a business