According to SpyT, the house will soon have another product available for its clients: E-ForEx. More products means more activities, in turn it will yield more revenues (note that I don't use the word earnings).
On another note, I read all the rankings and ratings about the OLBs. I think they all miss a point: to compare all of them without normalizing the client base. How can you compare a small OLB outfit like Siebel with E*Trade by not taking into account of scalability? The question need to be addressed is: what if the small OLBs get big, will they be as responsive, reliability and scalability as when they are small? I can't tell you the exactly answer but I can see it from E*Trade. When it was small, there were not too many complaints. They now grow leaps and bounds, they are the first one to encounter these problem and they will solve these real life problems. So there is an edge. Wait until you see other people flock into small OLB and overload the systems and start complaining. The point is: E*Trade is way ahead in dealing with the problem of responsiveness, reliability and scalability because it is facing these problems now. Remember it is always cheaper to do business now than later, i.e. there is no better time than now.
The other point I like to address is that the account size comparison. I have thought about the reason why Ameritrade has a bigger account size than E*Trade. The only explanation that I came up with is that E*Trade recruited so many new clients in that quarter. I expect that when new clients come in, the account size of these accounts may be small because they might want to test the water or in the process of transfer. Therefore, it skewed quite a bit. A more realistic comparison is to compare the average account size excluding the new accounts for the latest quarter. That will make more sense because the accounts that we compare have at least three months to settle and have a chance to trade, etc. All in all, I think it depends on how you use the statistics (or numbers), sometimes I just wish those media just have more thoughts on how to use statistics, especially dealing with qualitative areas. Otherwise, it is misleading. My only advice is not to believe the numbers but think about the assumptions that derive these numbers and ask yourself if they make sense. |
