How does a business remain competitive in the face of shrinking demand when it has fewer resources at its disposal and declining revenue? This is the conundrum facing the sell-side high-touch model. Execution through sales traders has been on the wane in favor of cheaper electronic channels. Head-count reduction has impacted the sell side, but this is not a case in which brokers can simply throw people at the problem. Technologies are needed to better understand what clients want.

In the past, the sell side's high-touch service modus operandi has been give-them-everything-and-the-kitchen-sink. A typical salesperson would send any one client thousands of pieces of communication a year. The result of this information overload is that the truly rare, valuable message gets lost in the shuffle, diluting the value of the high-touch offering. When brokers need to broadcast important messages, they need to find a way for their messages to rise above the fray. It comes down to a firm's ability to identify what to give to whom. The sell-side firm that best understands the holdings, strategy, internal politics and restrictions of its clients will be able to most effectively engage the buy side.

One frequently deployed strategy is to reorganize the high-touch channels to focus on cross-asset-class services. Other brokers are trying to buttress existing buy-side relationships by putting top brokerage executives in direct contact with clients. In addition, by utilizing the plethora of client information that brokers maintain -- such as trading strategies, client interest lists and research accessed -- the sell side can tailor its services.

But the effectiveness of the high-touch service is challenged by the lack of a formalized information-sharing process. In theory, when knowledge about a client is obtained by a high-touch professional, it is subsequently transmitted across the entire organization. Unfortunately, it is rare that the trader, research analyst and salesperson share information with each other.

However, with minimal impact on workflow, the high-touch business can utilize technology to automatically institutionalize client knowledge with the aim of better selling product, assessing P&L and improving employee productivity. Platforms powered by sophisticated enterprise search engines can aggregate and extract meaning from all types of client-related information across many electronic repositories -- from obvious applications (such as tracking service quality through contents of e-mails, transcribed phone conversations and instant messages) to the more complex uses (such as identifying potential sales opportunities from cross-referencing the brokerage's trading activity in a stock with a client's interest list and priority status).

And the value of capturing, organizing and mining client information is high. If the industry can bring value back to the relationship and increase sales trading by 10 percent, it would result in more than $1 billion in annual commission revenue.

Search technology has significant potential to inform business decisions. Nowhere is this more evident than in packaging cross-asset-class services. Without using an enterprise search application, a cross-asset salesperson would have to check numerous systems across multiple asset classes to get a clear picture of an account: the CRM platform, the commission management system, the trade platform. To make matters worse, the information constantly is updating, so by the time the salesperson is done completing the query, the picture may have changed. With a layer of search technology positioned above all these unique platforms, the salesperson could find relevant information more quickly and be alerted to any change in findings. b

Monica Schulz joined TABB Group in September 2007 as a research analyst. She previously was a reporter for Institutional Investor News, covering the brokerage beat.