December 8, 2023 • 9 mins
Broadridge CEO Tim Gokey discusses fintech that powers investing, corporate governance and communications.
Hosts: Paul Sweeney and Jess Menton. Producer: Paul Brennan.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
This is Bloomberg Business Week with Carol Messer and Tim
Steneveek on Bloomberg Radio.
Speaker 2 (00:06):
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
(00:28):
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.
Speaker 1 (00:41):
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
(01:03):
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.
Speaker 3 (01:27):
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.
Speaker 1 (01:36):
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
(01:58):
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.
Speaker 2 (02:18):
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.
Speaker 1 (02:33):
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
(02:54):
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.
(03:17):
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
(03:40):
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.
Speaker 3 (03:57):
Talk to us about how your company is providing guidance
when it comes to the democratization of investing.
Speaker 1 (04:05):
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
(04:25):
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
(04:48):
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
(05:11):
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.
Speaker 3 (05:25):
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.
Speaker 1 (05:39):
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
(06:02):
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
(06:25):
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
(06:45):
really across our products.
Speaker 2 (06:47):
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.
Speaker 1 (07:01):
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
(07:23):
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
(07:44):
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.
Speaker 2 (07:55):
All right, Well, I was on the floor the New
York Soca Change when to crash in eighty seven.
Speaker 1 (07:59):
Wow.
Speaker 2 (08:00):
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
(08:22):
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
(08:42):
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.
Speaker 3 (08:49):
Was that your first job coming out of college where
we were.
Speaker 2 (08:51):
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
(09:12):
ticket for a seal is no way to run a
business
This is Bloomberg Business Week with Carol Messer and Tim
Steneveek on Bloomberg Radio.
Speaker 2 (00:06):
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
(00:28):
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.
Speaker 1 (00:41):
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
(01:03):
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.
Speaker 3 (01:27):
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.
Speaker 1 (01:36):
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
(01:58):
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.
Speaker 2 (02:18):
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.
Speaker 1 (02:33):
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
(02:54):
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.
(03:17):
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
(03:40):
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.
Speaker 3 (03:57):
Talk to us about how your company is providing guidance
when it comes to the democratization of investing.
Speaker 1 (04:05):
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
(04:25):
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
(04:48):
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
(05:11):
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.
Speaker 3 (05:25):
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.
Speaker 1 (05:39):
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
(06:02):
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
(06:25):
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
(06:45):
really across our products.
Speaker 2 (06:47):
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.
Speaker 1 (07:01):
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
(07:23):
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
(07:44):
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.
Speaker 2 (07:55):
All right, Well, I was on the floor the New
York Soca Change when to crash in eighty seven.
Speaker 1 (07:59):
Wow.
Speaker 2 (08:00):
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
(08:22):
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
(08:42):
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.
Speaker 3 (08:49):
Was that your first job coming out of college where
we were.
Speaker 2 (08:51):
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
(09:12):
ticket for a seal is no way to run a
business
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Tim Stenovec
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