Jumping on the trend of using the Internet for financial applications, a new service allows users to directly buy, sell, and manage their investments on the fast-growing computer network.
The service is being provided by Net Investor, a division of Howe Barnes Investments Inc., a Chicago-based regional investment firm.
Net Investor allows Internet users to buy and sell orders for stocks traded on major U.S. exchanges and Nasdaq. They can also obtain up-to-the-minute information on their investment portfolios, and access advanced information services rivaling those of an investment professional.
The service is targeted at both first-time and experienced individual investors who want to do their own computerized investment research, and make their own investment decisions.
Net Investor is offering the Internet service on a trial basis to selected users interested in participating.
The service operates on software developed by Portfolio Accounting Worldwide, a division of Boston-based Security APL Inc. that provides portfolio management, performance measurement, trading, and reporting systems to professional investment managers.
Through partnerships such as this, the Jersey City-based unit is creating a financial marketplace on the Internet that will allow retail investors to take advantage of the same services that are available to investment professionals, said its president, Valerie Kahn.
Portfolio Accounting is currently partnered with Ford Investor Services Inc., San Diego, which provides financial research services, and Data Transmission Network, Omaha, which provides news and financial information. The software firm is planning to offer other financial products, including basic banking services, in early 1995, said Ms. Kahn.
Those with Net Investor accounts get the basic brokerage services, plus access to real-time stock market quotes; sophisticated investment portfolio management; research, market analysis, and planning tools; and news and financial information.
Additional capabilities to be added to the Net Investor service in coming months include mutual fund transactions, bond transactions, and margin accounts.
An advantage to providing financial services over the Internet, said Richard S. Griffin, senior vice president of Net Investor, is that customers have access to a wider array of resources. For example, Portfolio Accounting has built a number of "hyperlinks" to a variety of organizations, such as the Security Exchange Commission, he said. Users can also link directly to companies to obtain corporate financial reports.
Net Investor's customers are charged commissions for buying and selling securities, just as in traditional brokerage firms, and can access the other services free of charge. The commissions are priced competitively, said Ms. Kahn, adding that her company encourages its vendors to keep costs attractive to retail users.
Users without a Net Investor account can buy Portfolio Accounting's other services separately.
To open an account with Net Investor, users must access the World Wide Web, the multimedia portion of the Internet that enables downloading of photos, graphics, and audio. The Web also has a Windows style user interface to facilitate navigation.
While the major on-line service networks -- America On-line, Compuserve, and Prodigy -- offer text-based access to the Internet, through electronic-mail and bulletin board services, the companies do not yet provide access to the Web, although all are gearing up to do so.
Currently, users gain access to the Web through corporations or universities they're affiliated with. In addition, private service providers, such as Netcom On-Line Communications Services Inc., San Jose, Calif., provide "gateways" to the Web.
The privacy and security of clients' information is maintained using encrypted data transmission protocols available through software developed by Netscape Communications Corp. Netscape's software is publicly available at no cost on the Internet.
Other on-line services -- such as those offered by banks in conjunction with Prodigy and Microsoft Corp. -- provide some elements of Net Investor, such as stock quotes. But, these services do not yet allow trading transactions, or provide comprehensive portfolio management. Nor do the services make use of the Internet.
Since Net Investor makes use of the so-called information superhighway, and offers a more comprehensive service, Ms. Kahn does not think it directly competes with the on-line services.
"The segment of customers that will use Net Investor are not necessarily the same ones that use [the other services]," she said.
That's because many of those users are not yet accessing the Web, she said.
While interest in the Internet is growing among financial institutions, widespread security on the network still needs to be addressed.
A number of companies, including Netscape, Cybercash Inc., and Microsoft, are developing encryption techniques to secure transactions made over the Internet.