The investment business around the world is in a state of flux at the moment and it's not just the recent financial turbulence which has caused it. It has been building up for some time and what lies behind the changes are such things as financial liberalisation, modern communications and the enormous amounts of money now being shifted back and forth. Broadly speaking, stockbrokers and fund managers have three ways they can go if they want to be respected names known to more than just a few friends and retail accounts. The first is to become specialist: 'So you're looking for a doorknob repair stock, sir? Well, go no further. We're the international experts in doorknob repair investments, we've got all the highest rated analysts in doorknobs and we know where all the stock lies.' The second is to become a discount house. Offer minimal services to your clients, bang your fees right down to the ground and cross your fingers that your volume of business will rise enough to make up for the lower fees you now charge on it. The third, the way almost everyone wants to go, is to become the megabank that offers all things to all people and is ready to stump up squillions of dollars to get that business. It would be nice if it could be done without the squillions but this option is fading fast. The stakes are rising rapidly. So whither Robert Fleming now that it has finally acquired Jardine Matheson's half of Jardine Fleming (JF) for a mix of cash and shares? It is not taking the specialist route. As JF chairman Henry Strutt himself put it, JF was originally regarded as a specialist Asian house but has increasingly broadened its reach to offer a wider range of services to its clients. The deal has in part been done to make this easier. Discount house? Ahem. Well, yes, they aim to be competitive but Robert Fleming as a new incarnation of Charles Schwab? Next idea, please. Let's try to roll a big one out. Citifleming? Flemilynch? Deutschelemming? The point is that all the world's big houses are growing even bigger these days through mergers and Robert Fleming on its own is simply not in the big leagues any longer. This means something when big institutional funds around the world are cutting back on the list of intermediaries with whom they deal. The accepted doctrine around the world these days is that if you want to broaden your reach then broaden your capital base and headcount. But Mr Strutt says that the intention of the deal was not to prepare Robert Fleming for further mergers. The company is profitable on its own, he points out, which may be true. It's another question, however, whether it is any longer returning enough to please its shareholders. Once you start shuffling the structure of a company it is not always easy to stop. This deal is likely to attract the attention of a few big banks which have not yet lined themselves up with a thriving securities operation. If Robert Fleming does not take the initiative others may. And how does the deal affect us in Hong Kong? Not very much is the simple answer. The reorganised entity will continue to trade under the JF name here. The man in the street who buys JF unit trusts will see no change at all. Nor will shareholders of Jardine Matheson this year. The deal is scheduled to become effective early in the new year which means that JF results will continue to be equity accounted in the 1998 accounts. Following that, Robert Fleming, of which the group will hold a 17 per cent interest, will initially be dividend accounted in the group results with the intention of switching back to equity accounting again later. Time was when anything the Jardines group did was closely followed in Hong Kong but to find rapt attention given it these days you'll have read a James Clavell novel. Mickey Mouse marries Minnie Mouse, or divorces her, or whatever it is they've done. It would have been a big thing at one time but who cares so much now if that's where the story ends?