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HISTORY: 1992–2002 277Table 1North American Investors’ Ranking of Brokerage-Firm Features by Overall
Satisfaction* and Satisfaction with Their Brokerage Firm’s Features (as a% of respondents)*** 1 Good value for the services received 67.0%**
2 Quality of financial advice off-line 62.8%
3 Financial advisors’ knowledge 66.4%
4 Understanding of customer’s [my] personal priorities 63.0%
5 Quality and objectivity of research 62.8%
6 Accuracy of transaction execution online 83.4%
7 [Offline] fees and commissions 57.8%
8 Stability of the institution 80.6%
9 Accuracy of account information online 88.7%
10 Accuracy of transaction execution offline 80.7%
11 Innovation of new account features or types N/A
12 Speed of transaction execution online 79.7%
13 Online fees and commissions 67.7%
14 Helpfulness of call center representatives 69.2%
15 Accuracy of the statements 84.8%
16 Quality of financial training and education materials online 54.8%
17 Knowledge of call center representative 66.0%
18 Depth of market information online 63.8%
19 Quality of financial advice online 52.6%
20 Margin rates 41.2%
21 Ease of contacting customer service online 60.5%
22 Depth of financial research available online 61.1%
23 Speed of getting through to a call center representative 70.0%
24 A clear privacy policy 70.9%
25 Depth of account information online 79.5%
26 Speed of response to customer service requests submitted online 61.7%
27 Ability to find what customer wants on the Web site 79.0%
28 Speed of the site 76.1%Note: Based on a survey of 1,957 North American investors.
Source: Forrester Research, March 2002. eMarketer, Inc.©c2002 (http://www.eMarketer.com)
∗Asked which features most contributed to overall satisfaction with primary brokerage firm.
∗∗Asked to indicate, about the features above, which they are somewhat or very satisfied with their primary
brokerage firm.The “thin, delicate strands” that make up the web of on-
line financial services range from retail and institutional
investors—entities such as financial portals, message
boards, and day traders—to organizations that see the
transactions to fruition. Participants who execute the
trades include online stock brokerages, securities ex-
changes, newly emerged electronic communications net-
works (ECNs), and regulatory bodies (such as the U.S.
Securities and Exchange Commission) that set the mar-
kets’ rules. In a relatively short time, 10 years or less, all
of these participants either have been born or have trans-
formed their operations from a system of personal con-
tacts (often face to face) to computerized transmission
and resolution.Day Traders
Day trading is an inherently risky, extremely short-term
investment activity, with investors often buying and sell-
ing stocks within minutes in order to take advantage of
rapid price changes. Professional investors had sole ac-
cess to this strategy before the Internet opened it up to
retail investors. Some of the purely online brokerages—
such as Datek.com—specialized in serving the day trad-
ing market and developed direct trading processes thatspun off as ECNs such as Island, formerly a subsidiary of
Datek. Day trading reached its peak popularity from 1998
to 2000, when the bull market gave traders the illusion
of invincibility. With the bursting of the dot-com bubble,
however, investment activity slowed across the board as
investors became more cautious. Although day trading
certainly exists in 2003, it is much less prevalent than in its
heyday.Financial Portals and Message Boards
According to the comScore Media Metrix online ratings
service, the top five Web properties as of July 2002 were
AOL–Time Warner, Microsoft, Yahoo!, Google, and Terra
Lycos. Whereas a “property” is defined as all sites owned
by a given corporation, each of these domains features
a gateway to financial news, and all but Google include
financialdata, links, and tools as well as general-interest
home pages (respectively http://www.aol.com or the ISP’s
welcome page, http://www.msn.com, http://www.yahoo.
com, http://news.google.com/news/gnbusinessleftnav.
html, and http://www.lycos.com). In addition to these
sites, major news organizations such as CNN and CBS,
as well as software firms such as Intuit, have created
their own gateways to financial content. CNN offers