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Non-Tech : CYBERTRADER -- Ignore unavailable to you. Want to Upgrade?

To: JDTrader who wrote (2412)	5/1/1999 5:11:00 PM
From: Sir Francis Drake	Respond to of 3216

JDTrader - obviously, if we pay less in commissions, it helps our balance sheets. But there are other things to consider. Would you rather pay a little more to ennable your broker to have the capital to make improvements that would give you a competitive advantage vis a vis a broker who is cheaper, but costs you more by way of inferior executions, service etc? IMO, you should look at the total cost. I have accounts with several brokers. The obvious way to judge is to say: if two brokers provide effectively the same level of service, choose the cheaper one. Trouble is, everything is in flux, nothing permanent. I was happy with Datek's service at $9.99 up to the first few months of 98. Then they became impossible. So, I looked into Cyber at much higher cost. That was initially a mistake, because Datek improved dramatically, while Cyber was having serious problems. Well, recently the situation reversed, and now Cyber is worth the extra $. What next week will bring, I don't know. So, I'm stuck with needing to keep accounts open with several brokers. Even in the scenario above, where of two brokers who provide the same level of service, you choose the cheapest, that may not be the best route. Because the more expensive one could be gathering capital to improve and outdistance the second broker. Maybe you should wait for that and jump ship? Only that too can change in time. Bottom line, this is not a simple matter - I've switched around a fair number of brokers, and can tell you the only thing that's constant, is constant change. I guess that's why the free market will decide many of these issues. If a broker provides lousy service and charges high prices, well, if the consumer catches on (and forums like SI are a great way to alert consumers to what's up), that brokers will lose business. Should traders get together and demand lower prices? Is it like getting together and demanding that Mercedes lower prices to match Yugo? The only reason to ever get together, is if you like a particular broker, but think they are going to lose business by a certain policy - and there are competitors waiting in the wings, with equivalent product. I did that with Cyber - I complained loudly about problems a few weeks ago, and many other traders joined in. I did that to send Cyber a message - wake up... "if you don't improve pronto, you will lose business, because there are other brokers out there with better service at a better price". I could have silently left - but that would have not given Cyber a chance to react and improve before a lot of damage was done from customer attrition. What's in it for me? I aviod the hassle of changing a broker, and I can stay with a broker I like. Of course, if they did not react, I'd have left. Bottom line, try to think about cost from a bigger perspective, that includes the broker side of things. If you simply force brokers to lower costs to the point where in order to stay in business they will cut back on improved service (software, order execution, accounting etc, etc, etc), you will damage the long term health of the industry and the long term interests of traders themselves. Let us try to be discriminating consumers, but realistic consumers.