Fidelity Investments is upgrading its technology to double its on-line trading capacity, according to a senior executive.
The move is partly a response to on-line snafus caused by recent market volatility, said Robert P. Mazzarella, president of Fidelity Brokerage Services. Fidelity also expects to gain clients through an advertising campaign launched yesterday that touts trading on the Web.
Fidelity last week added servers to its operations center in Merrimack, N.H., Mr. Mazzarella said. Next month the company will further increase its capacity by adding more servers.
The additional servers will give the company up to twice the processing capacity available during the week of Oct. 27, when the stock market gyrated wildly. Servers are "the guts" of the Web site, a Fidelity spokesman said.
During trading on Oct. 28, Fidelity Brokerage was operating at roughly 75% of its usual capacity, something it doesn't want to deal with again, he said.
Like a number of its peers, Boston-based Fidelity Brokerage's on-line trading systems struggled to deal with the record trading volume. On Oct. 27, 1.2 billion shares traded in a single session at the New York Stock Exchange.
"What if we saw a two billion day?" said Mr. Mazzarella.
Even before October's messy market, he said, Fidelity was looking to add servers. When the Dow fluttered, the company decided to accelerate its efforts.
Fidelity also expects to gain customers because of the new advertising campaign. Handling the new business would require more processing capacity, Mr. Mazzarella said.
The campaign, scheduled to run through mid-1998, incorporates both television and print media, said Mr. Mazzarella. The ads are set to run on cable channels like CNN and CNBC and in financial publications like the Wall Street Journal, Barron's, Smart Money, and Kiplinger's.
Boston-based Hill Holiday created the campaign, which focuses on Fidelity's on-line trading fees. The drive to promote the on-line brokerage business comes on the heels of a campaign this fall that sought to reinforce brand identity.
Fidelity's fees start at $14.95. Fidelity and Quick & Reilly, another discount broker, cut their fees last month. Deep discounter Ameritrade Inc. of Omaha has come out with an $8 fee, and this week Quick & Reilly created a purely electronic broker, Suretrade Inc., which charges $7.95.
But Mr. Mazzarella said he doesn't believe the discount brokers are engaged in a price war. Their prices are based on their products' value, he said, and Fidelity needn't respond to Suretrade.
"We feel that our price and the value surrounding it are appropriate, and we think we can attract customers to the Fidelity brand."