A recent survey of leading online brokerage firms by Deloitte & Touche reveals that average use of online accounts has declined 42% as investors are taking a more conservative approach to their portfolios due to market volatility. The slowdown and unease in the US economy which began in early 2000 has significantly affected investment in the securities which has subsequently had a knock-on effect on online brokerages. This contrasts with the currently strong online trading market in Asia (see Forecasts).
In order to encourage potential investors, the survey suggests that online brokerages are now altering their business model and are now providing users with financial information and advice, quality customer service and more diversified products and technologies. The need to compete for business has meant that companies have had to re-evaluate client needs in order to survive.
“Competing on price isnÂÂ’t enough anymore,” said George Simeone, a partner at Deloitte & Touche. “The bear market has caused online securities firms to change their focus from generating trading volume to capturing longer-term investors with high-value accounts.”
