Sirloin Stock Information (SM)
July 20, 2005
Consumer Satisfaction with Online Stock Trade Services
The 1990s were a time when the stock market was rapidly
rising. During that prosperous time, companies in mutual
funds, stock trading, and investment packed the TV with
advertising. However, the trading world has become less
vocal since the loss in consumer confidence and the sharp
declines in stock values. In spite of this skepticism, the
stock trade industry today is alive and well. In addition,
the stock trade industry online has held up.
J.D. Power and Associates conducts a yearly online trading
investor satisfaction study. This study is sent to nearly
5000 online trading company users across the U.S. Scottrade
was voted number one by consumers in overall satisfaction,
for the fifth time in a row, in 2004. Scottrade also
received equally high marks in low cost of trades,
efficiency of trade of trade execution, customer service,
information resources, and website capacity. Ranked in
order after Scottrade was BrownCo, Fidelity Investments, and
Smith Barney Access. Since 2003, Smith Barney Access and
Fidelity Investments gained significantly in ranking.
The cost of trading is the number one issue with consumers.
This issue is followed by the availability of customer
service. The ability to talk with a qualified broker over
the phone or in-person at a local service center is
important to approximately 60% of online investors. In
fact, nearly 50% of online investors take go to a center to
get in-person advice or to make a transaction ~ mostly a
deposit. An in-person visit is rarely needed to resolve a
problem or a complaint. Trade companies that were
previously only present online recognize this important
trend among its users and started to add branch offices in
cities across the country.
It may be surprising to learn that online trading services
have captured about 8% of households that have an Internet
connection, which is up from 7% in 2003. People who were
the first to leave the stock market during the turmoil of
the 1990's are returning. This includes the demographic
groups who have a lower tolerance for risk, are more
conservative in general, or are under the age of 35. As
young people, who are known users of the latest technology,
return to the stock market, they should increase the
percent of Internet users who use online trading services.
In addition to Scottrade, BrownCo, Fidelity Investments,
and Smith Barney Access, the rankings continue with
American Express, Charles Schwab, TD Waterhouse, Harris
Direct, Ameritrade, Merrill Lynch Direct, and E*Trade
Financial. However, the differences in satisfaction among
the online trading companies not in the top three are not
that great. Being lower in the rankings may only imply
"does not really stand out" in J. D. Powers terminology
and does not mean incompetence in any way.
Even if you're not absolutely ready to trade stocks, bonds,
or mutual funds online, nonetheless visit these companies'
websites. You can access articles for public viewing and
other reliable financial advice that can aid you in making
good decisions about your financial future.
Copyright 2005 Marion Cordola. All rights reserved.
Marion Cordola is the webmaster of
a leading on-line resource for anyone looking for trade
information. For any questions, make sure you visit: