To: Gil Gilbertson who wrote (471 ) 11/19/1998 1:04:00 PM From: AugustWest Read Replies (1) | Respond to of 1848
here's how it's currently playing out....... E-Trade leads online broker scorecard It holds on to No. 1 ranking from Gomez Advisors By Steve Gelsi, CBS MarketWatch Last Update: 11:38 AM ET Nov 19, 1998 NewsWatch CONCORD, Mass. (CBS.MW) -- E-Trade held on to its No. 1 slot ahead of DLJ Direct to lead Gomez Advisors' quarterly Internet Broker Scorecard, which ranks 55 contenders for the online-broker crown. "It's a two-horse race at the top," Gomez Associates founder Julio Gomez told CBS.MarketWatch.com. "They're significantly ahead of the pack." Publicly traded E-Trade (EGRP) took the No. 1 spot over DLJ Direct last quarter after the Donaldson, Lufkin & Jenrette (DLJ) unit had held it for the previous four quarters. The two firms led in overall scores based on five categories: ease of use, customer confidence, on-site resources, relationship services and overall cost. Ameritrade (AMTD), which is traded on Nasdaq, finished just out of the top 20. E-rave Though its $14 typical commission is nowhere near the lowest among the online brokers, "E-Trade excels at customer education, tutorials and help, as well as sophistication," Gomez said. "They're great at issuing news and pricing alerts, which are important to people." Filling out the top five were No. 3 Datek, which moved up from the fifth slot; Discover; and Waterhouse. "Datek's been methodically and steadily adding features and improving the design of their site," Gomez said. "It's really starting to show." The list, provided exclusively to CBS.MarketWatch.com, will be released late Thursday morning at www.gomez.com. Gomez evaluated 55 companies in its latest scorecard, but the category itself has grown to 100 companies, up from 98 just a few weeks ago. About 6.1 million Americans trade stocks online, up from 1.5 million in the past two years. About a quarter of the 100,000 retail trades per day take place on the Internet, according to Piper Jaffray. Categories Suretrade won the cost contest, which was judged on commissions for 20 trades and margin interest on $5,000. "Suretrade's $7.95 commission and low margin rates helped them leap from Farsight, which dropped its $7 promotional rate during the quarter," Gomez said in the report. Datek won the top ranking as best broker for the "Hyper-Active customer trader" category. "A simple interface and fast execution are crucial to this market junkie," the study said."Their trading is so frequent, they don't even want to to re-enter their password on every order." Developing trends More brokers this quarter are offering real-time updates of account balances, available on 13 of the 55 firms polled. Accounts are updated right after trades, not overnight. More help is available now. Sixty-nine percent of the firms polled offer a glossary of investment terms and site help. Online brokers are also moving into banking services. More than half of the brokers offer free, unlimited checking with an account, 13 percent offer an online bill payment capability. The scorecard It's the seventh scorecard produced by Gomez, which says it's the only company that provides rankings in the online brokerage game. Gomez's rankings are often featured in ad campaigns by online brokers, not unlike the J.D. Power survey's role in car advertising. In addition to ease of use, customer confidence, on-site resources, relationships services and overall costs, the survey ranks the online brokers on a checklist of 140 criteria. The brokerage with the most points wins. Data is gathered through surveys sent to brokerages, with their answers verified by Gomez's inspection of the respective Web sites. It also tracks download times from Web sites and general ease of use. Gomez also calls customer-service reps with questions to see how brokerages handle consumers. Steve Gelsi is a reporter for CBS MarketWatch.cbs.marketwatch.com