Buying customers is a time-honored way to do business, the idea being that the cost is low, and the return is high. But returns that are more than marketing claims are less common.
San Francisco-based Capital Management Sciences Inc., though, allows its Bond-Vu software to be given to broker-dealer customers as a sales tool, and reports from the field suggest it really works. Bond-Vu provides users with a functional menu of bond analysis tools, as well as real-time bond information. Among the data included: price/yield calculations; a variety of fixed-income benchmarks, including U.S. Treasury and U.S. market composites; ten-day and deep history pricings; and Monte Carlo simulations.
All calculations are Securities Industry Association-compliant. Most fixed-income instruments are covered, including collateralized mortgage obligations and embedded options.
Bond-Vu can be given to third-party institutional customers by lessees on a completely transparent basis. Broker-dealers can even send it to them with their own logo. The lease fees are on a sliding scale, typically about $160 per month.
The idea seems to actually work, according to James Fowler, a principal in the San Francisco office of Montgomery Securities Inc. "There's many things that you give away in the brokerage business that are of questionable usefulness, but (Bond-Vu) is very useful. It's far more efficient (as a sales tool) for me, (and while) I'm eating some expense here, it's worth it if I can be more efficient," he says. "I don't have to stand at a fax machine anymore. When I call up, they already have the information they need to act, so it's made communicating in the sales process more efficient and productive for me."--reinbach tfn.com