Brokerage sees future: technology

INVESTING

August 29, 1999|By Bill Atkinson

SIXTY-SIX-year-old Harold N. Peremel has joined the revolution, and he's loving it.

Peremel, president of Peremel & Co., is helping transform the Baltimore-based brokerage he started in 1974 to take advantage of the technology revolution sweeping Wall Street.

Two years after the company began offering online trading in 1997, it has introduced a palm-size beeper that lets customers buy and sell stocks, trade options and keep tabs on the market. It also stores messages and fax notes, and holds hundreds of addresses and phone numbers.

That is just for starters. In September, Peremel & Co. plans to give customers a chance to buy shares in initial public offerings through their home computers in an arrangement with New York-based Wit Capital Corp., an aggressive online investment banking and brokerage company. And it hopes to let customers buy and sell stocks over the Internet in evening trading sessions.

"You can't deny it. Anybody who doesn't embrace it [technology] is going to fall by the wayside," Peremel said. "The genie is out of the bottle, and the genie can't be put back in."

Peremel & Co. has just 15 employees but offers full-service brokerage, discount brokerage, financial planning and money management services, overseeing about $700 million for clients across the country.

Investors who walk into its headquarters or punch up its Web site can choose from 7,000 mutual funds and scan research reports from some of the country's top research houses.

Many of those products and services are purchased from a unit of Fidelity Investments, the country's largest mutual fund company, which allows Peremel to market them under the Peremel name.

"We are right there with everybody else," Peremel said. "We have all the whistles that anybody would want, and you can still come in and talk to us. We don't take a back seat to anybody."

The push has increasingly been to satisfy investors' growing demand for trading stocks online and buying companies that are coming to market for the first time.

"It is all about the little guy," said Mitchell N. Peremel, Harold Peremel's 36-year-old son and the brains behind the most recent changes. "The shift of power is changing from the institution to the little guy."

Peremel & Co. has about 12,000 accounts, up from 8,000 a year ago. About 1,000 accounts trade online, and Mitchell Peremel expects online trading at the company to grow about 35 percent a year over the next five years.

"Every week there are more and more people asking for this service," he said.

About 100 clients use the beeper, which sells for $359 and can be leased for $23.95 a month. "I think it is going to do great," he said. "It is about convenience and ease. The beeper is for somebody who is more active in the marketplace."

Teaming up with Wit Capital could be a breakthrough for the company. The relationship will enable retail customers -- typically excluded from IPOs -- to buy shares in initial public offerings on a first-come, first-served basis. Such investments are risky but can be huge winners.

Peremel & Co. has yet to market the service but has signed up 300 clients, Mitchell Peremel said. "We hope to have thousands [of customers] when we take this thing out," he said.

Harold Peremel has seen such revolutions before. He started the company shortly before one of the biggest revolutions in the brokerage industry on May 1, 1975.

"Mayday," as it is called, allowed brokerages to lower the commission rates they charged retail customers. Before that date, commission prices were fixed for all brokerages. Mayday prompted price wars and spawned the discount brokerage industry and the largest discounter, Charles Schwab & Co.

Harold Peremel started his discount brokerage to seize upon the trend. "I saw people coming in here and I would say, `I will give you lower prices,' " he said.

He is convinced that technology will continue to change the business and that his company must keep up.

It hasn't taken much to convince him. His grandchildren, ages 3 and 6, play with a laptop computer, he said. That is proof enough.

On a recent cruise in the Baltic Sea, a daily three-hour computer course was jammed. "There was a line just to get in," he said. "And these are seniors. It is just going to get bigger and bigger and bigger."

He acknowledges that not all of the changes are for him. The beeper, he said, is "incredible," but he doesn't use it.

"My fingers are too big for it," he said.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.