Gomez Advisors Ranks E-Trade as No. 1 Overall Online Broker; Consumers Demand Full-Service Offerings Over the Web
Business Wire - September 13, 1999 13:02
LINCOLN, Mass.--(BUSINESS WIRE)--Sept. 13, 1999--Gomez Advisors Inc., a leading provider of Internet consumer e-commerce research and analysis, Monday released the results of its Fall 1999 Internet Broker Scorecard.
Of 50 online securities firms that met the Gomez Advisors criteria, E-Trade (Nasdaq:EGRP) topped the Gomez Advisors Scorecard, followed by Charles Schwab (NYSE:SCH), Fidelity, NDB (NYSE:NDB) and DLJ Direct (NYSE:DIR).
According to Gomez Advisors Senior Analyst Dan Burke: "The most significant news in online brokerage is that mainstream investors, not active traders, are having a big impact on the growth and scope of the market. These investors come to online brokerage sites with specific goals in mind, and they are driving the development of robust Web offerings.
"Hyperactive traders are no longer driving the growth of the online brokerage business," Burke said. "What we're experiencing are more and more 'traditional investors' migrating to the Internet.
"These customers need more digital handholding and want a comprehensive range of offerings under one umbrella: equity and mutual-fund research and screening tools, financial planning, enhanced customer service, educational content, tax help and banking," Burke noted.
The industry leaders have responded by making these tools and features available. E-Trade added 24x7 customer service, Charles Schwab improved its financial and tax planning tools, Discover Brokerage added after-hours trading, DLJ Direct now offers online mortgage origination, and NDB's University has become an industry standard.
A recent GomezPro and Harris Interactive report, titled "The State of Online Investing," revealed that the early adopters of online brokerage services were primarily Hyper-Active Traders, who accounted for more than 50 percent of all customers. Now they represent less than 10 percent of the Internet investors, whereas Serious Investors and Life Goal Planners constitute 87 percent (48.5 percent and 38.5 percent, respectively) of the market.
Today, there are 5.1 million online investors, who represent 11.2 million online accounts.
Internet brokers who once relied heavily on trading revenues alone are migrating toward a balanced mix of fee- and commission-based products and services.
"The online brokerage industry has matured and can no longer be viewed as simply a vehicle for low-cost trades for the active trader," explained Burke.
"Volume has served the industry well as a near-term indicator, but the emphasis must shift to assets. Accounts are the gateway to assets, and brokers must take steps to attract the proper accounts or risk an over-reliance on unpredictable trading revenues," he concluded.
About Gomez Advisors
Gomez.com, at www.gomez.com, is an online leader in providing consumers with the latest e-commerce information and tools that promote informed online purchasing decisions. The Gomez.com site has grown into a premier online hub where consumers can evaluate online service and product providers through nationally recognized Internet Scorecards.
These Scorecards rank the performance and quality of online service offerings for selected industries, including: airlines, auctions, autos, banks, booksellers, brokers, drugstores, furniture, grocery services, insurance, music, pet supplies, sporting goods, travel and videos.
GomezPro is the professional-services division of Gomez Advisors and features foremost industry experts offering detailed, proprietary research, tools and analysis for specific e-commerce industries. GomezPro provides analysis and projections of e-commerce trends, competitive analysis and information on consumer behavior for companies that want to attract and retain Internet customers.
Note to Editors: Gomez.com, Gomez Advisors, Internet Scorecard and GomezPro are trademarks of Gomez Advisors Inc. All other products and brand names are trademarks or registered trademarks of their respective owners.
CONTACT: Gomez Advisors Inc., Lincoln
Karen Lechner, 781/257-2000
or
Leavitt/Bell Group, Pasadena, Calif.
Tiffany Massey, 626/564-9500, ext. 24
tmassey@lbgcomm.com
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