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Broadridge Financial Solutions

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Broadridge Financial Solutions, Inc.
Company typePublic
IndustryFinancial technology
PredecessorBrokerage Services arm of ADP (founded 1962)
Founded2007; 17 years ago (2007)
Headquarters
Lake Success, New York[1]
,
United States
Key people
Tim Gokey (CEO), Chris Perry (President), Richard J. Daly (Chairman)
RevenueIncrease US$6.507 billion (2024)[2]
Increase US$1.303 billion (2024)[2]
Increase US$0.698 billion (2024)[2]
Total assetsIncrease US$8.242 billion (2024)[2]
Total equityDecrease US$2.168 billion (2024)[2]
Number of employees
14,000 (2024[2])
Websitebroadridge.com

Broadridge Financial Solutions, Inc. is a public corporate services and financial technology company. Headquartered in Lake Success, New York,[3] the company was founded in 2007 as a spin-off from Automatic Data Processing.[1] Broadridge supplies companies in the financial industry with financial documents such as proxy statements and annual reports, as well as shareholder communications solutions such as virtual annual meetings.[1][4]

Other products and services include financial software and infrastructure[5] for corporate governance,[6] proxy[5] and regulatory communications, and investor communications.[7] It also hosts trading platforms[8] and provides software and infrastructure[5] for asset[8] and wealth management.[5]

History

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1962-2006

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Broadridge was founded in 1962[5] as ADP Brokerage Services Group,[9] a business unit[6] of the American payroll processing company Automatic Data Processing (ADP).[5] Operating as ADP's shareholder communications division,[10]: 27 [11] it initially served one client by processing an average of 300 trades per night.[9]

1970s legislation in the United States changed the industry by mandating two new processes for securities and their transfer: immobilization and dematerialization. These processes required physical stock certificates and other paper securities to be kept in bulk by intermediaries, with the sale and ownership of securities recorded through chains of transaction records instead of possession of paper certificates. These changes increased securities trading and led to a rapid rise in stock ownership, and also had the effect of putting intermediaries between companies and their shareholders.[10]: 1–2  Before the new laws, banks and brokers had typically maintained in-house proxy departments to manage the shareholder voting process.[11] The need for shareholders to vote by proxy through intermediaries, however, created a new industry to manage that voting process,[10]: 1–2, 48  which remained in place even after electronic certificates eliminated the need for intermediaries.[10]: 1–2  ADP Brokerage Services Group operated as one of those intermediaries,[9] and by the mid 1990s, Automatic Data Processing dominated the proxy voting and shareholder communications services industry.[10]: 48 

2007-2018

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At the end of March, 2007, ADP spun-out the entirety of their shareholder communications activities, resulting in the formation of Broadridge Financial Solutions.[10]: 27 [11][6] Operating as an independent public company,[5] Broadridge was headquartered in Lake Success, New York[3] with Rich Daly serving as CEO.[12] Broadridge facilitated its first virtual annual meeting, for Intel Corp, in 2009.[4] In 2010, the company processed about 350 billion shares for its clients.[13]: 2  Congress evaluated aspects of corporate governance, including shareholder communications and proxy voting, in the wake of the financial crisis of 2007–2008.[14]: 1–2  In 2010 a report submitted to the House Committee on Financial Services by a coalition headed by Business Roundtable noted the near monopoly position of Broadridge in handling proxy voting.[14]: 249  Broadridge had retained its predominant position in the proxy processing market by 2013.[13]: 17 

In 2016, it facilitated virtual annual meetings for 154 companies, an increase of 71% from the year prior.[4] Also in 2016, Broadridge acquired Spence Johnson, an institutional financial flow data intelligence firm.[15] In the summer of 2016, Broadridge acquired the North America Customer Communications (NACC) unit of DST Systems, a Kansas City-based business services provider, which provided the company with addressing information for about 75% of all public company shareholders in the United States and Canada.[1] Later in 2016, Broadridge bought M&O Systems, a small Manhattan-based financial services company.[1] In 2017, the company had 10,000 employees.[16] Between 2007 and 2018, the company made over 30 acquisitions in total.[12] In a 2018 letter to the SEC, Broadridge stated its mailings reached 140 million investor accounts.[3] In 2018, UBS Group AG's Wealth Management Americas unit became the first large client to begin using Broadridge's new software platform for "front- and back-office tasks, like opening client accounts, trade routing and order management and asset servicing."[17]

2019-2024

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On January 2, 2019, Tim Gokey succeeded Rich Daly as Chief Executive Officer. Daly became Executive Chairman of the Board.[9] In November 2019, Broadridge acquired ClearStructure Financial Technology, which provided portfolio management solutions for the private debt markets.[8] Broadridge acquired FundsLibrary, which specializes in fund document and data dissemination in Europe, in March 2020. It was combined with the Broadridge brand FundAssist and renamed Broadridge Fund Communication Solutions.[18] In 2021, it had assets of US$8.119 billion, equity of $1.809 billion, net income of $547 million, operating income of $678 million, and revenue of $4.993 billion.[19]

The company agreed in 2021 to acquire the Sweden-based Itiviti from Nordic Capital for $2.5 billion.[6] In 2021, Broadridge announced that RBC Wealth Management-U.S. would be its second client utilizing its new advisor technology platform for wealth management.[20] In September 2022, Cetera became the first company to use Broadridge's Wealth InFocus communications platform, which focused on communications related to wealth management.[21]

After Broadridge began testing the use of blockchain for proxy voting in 2018,[12] by 2023, companies such as UBS and Société Générale were using Broadridge's VMWare Blockchain distributed ledger software to facilitate repurchase agreements.[22] In 2023 Broadridge stated it had around 1,100 clients who were brokers, and that it provided proxy services for around 80% of outstanding shares in the United States.[7] In June 2023, LTX, a corporate bond trading platform owned by Broadridge, launched BondGPT, a chatbot focused on bonds and utilizing OpenAI's GPT-4.[23] Broadridge released its Sentry software, a loan portfolio management platform, in 2024,[24] at which point specific offerings included “new mutual funds, ETFs, managed accounts, app-based trading, and zero-commission trading." It had also enabled “pass-through voting,” allowing shareholders to do proxy votes directly rather than through an investment manager,[5] and a mobile app for proxy voting at annual meetings.[7]

Personnel

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The company has 14,000 employees as of 2024.[25] In 2024, the CEO was Tim Gokey[5] while Chris Perry served as President. The eleven-member board includes chairman Richard J. Daly, Leslie Brun, Annette Nazareth, Pamela Carter, Robert Deulks, Melvin Flowers, Tim Gokey, Brett Keller, Maura Markus, Eileen Murray, and Amit Zavery.[26]

See also

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References

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  1. ^ a b c d e Madore, James T. (9 November 2016). "Broadridge sales soar following merger; profits up slightly". Newsday. Retrieved 17 July 2018.
  2. ^ a b c d e f https://www.broadridge-ir.com/news/news-details/2024/Broadridge-Reports-Fourth-Quarter-and-Fiscal-2024-Results/default.aspx
  3. ^ a b c Darbyshire, Madison (August 23, 2021), A true monopoly': fee fight reveals heft of Wall Street linchpin Broadridge, Financial Times
  4. ^ a b c Kennedy, Patrick (25 February 2017). "Companies embrace virtual annual shareholder meetings". Business. StarTribune. Minneapolis, Minnesota. pp. D1–2. Retrieved 17 July 2018 – via Newspapers.com (Publisher Extra). Note: The URL in citation is for segment on D2; segment on D1 appears at this url.
  5. ^ a b c d e f g h i Mehta, Stephanie (January 8, 2024), These CEOS aim to make financial sevices more accessible to consumers, Fast Company, retrieved November 8, 2024
  6. ^ a b c d Trentmann, Nina (March 30, 2021), Broadridge CFO Looks to Reduce Debt After $2.5 Billion Deal, The Wall Street Journal, retrieved November 8, 2024
  7. ^ a b c Darbyshire, Madison (October 12, 2023), Broadridge Financial's proxy 'monopoly' faces challenge from start-ups, The Financial Times, retrieved November 13, 2024
  8. ^ a b c "Broadridge Expands Asset Management Technology Suite With Acquisition of ClearStructure". Broadridge Financial Solutions. November 20, 2019. Retrieved 4 December 2019.
  9. ^ a b c d History, Broadridge, 2024, retrieved November 8, 2024
  10. ^ a b c d e f Donald, David C. (18 September 2007). The Rise and Effects of the Indirect Holding System (Report). Working Paper Series. Vol. No. 68. Institute for Law and Finance. Retrieved 18 July 2018 – via Internet Archive (PDFy Mirrors). {{cite report}}: |volume= has extra text (help)
  11. ^ a b c Wilcox, John C.; Niels C., Holch (2018). "Chapter 11: "Street Name" Registration & the Proxy Solicitation Process". In Goodman, Amy L.; Olson, John F.; Fontenot, Lisa A. (eds.). A Practical Guide to SEC Proxy and Compensation Rules (5th ed.). New York: Wolters Kluwer. pp. 11–16, 17. ISBN 9780735598959. OCLC 1003678941 – via Google Books. Note: Source includes specific details on transfer of proxy authority, too detailed to include here, and a generic process rather than company-specific.
  12. ^ a b c "BNN Bloomberg – Canada Business News, TSX Today and Interest Rates".
  13. ^ a b Subcommittee on Capital Markets and Government Sponsored Enterprises, Committee on Financial Services (5 June 2013). Examining the Market Power and Impact of Proxy Advisory Firms (Report). Government Publishing Office. Retrieved 18 July 2018 – via Internet Archive (U.S. Congressional Hearings).
  14. ^ a b Subcommittee on Capital Markets Insurance and Government Sponsored Enterprises, Committee on Financial Services (21 April 2010). Corporate Governance and Shareholder Empowerment (Hearing) (Report). Vol. One Hundred Eleventh Congress, Second Session. Government Publishing Office. p. 249. Retrieved 18 July 2018 – via Internet Archive (U.S. Congressional Hearings). Appears under heading "The Lack of Competition in Proxy Processing Services".
  15. ^ Baker, Sophie (11 July 2017). "Broadridge Financial Services acquires Spence Johnson". Pensions & Investments. United States: Crain Communications. Retrieved 17 July 2018.
  16. ^ "Annual Report 2017" (PDF). Broadridge Financial Solutions. 2017. Retrieved 17 July 2018.[self-published source]
  17. ^ https://www.reuters.com/article/idUSKCN1MZ1MM/
  18. ^ Inc, Broadridge Financial Solutions. "Broadridge Completes Acquisition of FundsLibrary". www.prnewswire.com (Press release). Retrieved 2020-03-03. {{cite press release}}: |last= has generic name (help)
  19. ^ "Broadridge Financial Solutions, Inc. 2021 Annual Report" (PDF). s1.q4cdn.com. 30 June 2021. Retrieved 7 October 2021.
  20. ^ "RBC Taps Broadridge to Facilitate Digital Platform Overhaul".
  21. ^ "Wall Street's Model-Portfolio Boom May Hit $11 Trillion by 2028". Bloomberg. 15 March 2024.
  22. ^ "Broadridge Now Conducts $70 Billion Of Blockchain Repo Trades Per Day", Forbes, May 8, 2023
  23. ^ "Generative AI is coming for bond trading, but a massive hurdle still stands in the way of the market digitizing". Business Insider.
  24. ^ "Broadridge helps NorthWall Capital to grow its credit business". 7 March 2024.
  25. ^ About, Broadridge, 2024, retrieved November 13, 2024
  26. ^ Management and Board, Broadridge, 2024, retrieved November 12, 2024

Further reading

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  • Kaul, Asha (2012). "Chapter 2. Ardhanareshwar: Unison of Ultimate Reality". In Kaul, Asha; Singh, Manjari (eds.). New Paradigms of Gender Inclusivity. New Delhi: PHI Learning. ISBN 9788120345133. OCLC 896478066 – via Google Books. Broadridge India, formerly a brokerage services division of Automatic Data Processing (ADP) Inc., began operating as an independent public company in India in March 2007. (opening sentence of chapter abstract)
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  • Business data for Broadridge Financial Solutions, Inc.:
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