Active Traders in the US: Perspectives on Trading, Behavior, and Technology Adoption

by Ashley Globerman, March 14, 2016
Industry Trends
North America

Abstract

Self-directed investors are individuals who place their own trades online and are a subset of the retail investor market. The online self-directed brokerage market consists of investors with a wide range of trading activities, demographic profiles, risk tolerances, and technology adoption levels. Active traders, defined by Celent as traders who make at least 10 trades per month, are a critical segment of the self-directed retail brokerage market in the United States. Active traders represent a small percentage of the overall self-directed market; however, they are a profitable division to most online brokerage firms. 

This report provides an overview and analysis of the active traders market, including key market and technology trends, major market players, and Celent’s outlook for the active trader segment. 

The larger online brokerage space is a highly competitive and crowded market in the US, and the same is true of the active trader market. The active trader has a plethora of choice when deciding between active trader platforms.

“The proliferation of the Internet and evolution of technology has brought the financial markets to the retail investor,” says Ashley Globerman, an analyst with Celent’s Wealth Management practice and author of the report. “Advancements in technology and the growing sophistication of retail investors have motivated firms to innovate and offer more sophisticated features, while putting pressure on commissions.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

The Online Brokerage Market

2

 

Key Research Questions

2

 

Investor Taxonomy and Preferences

2

 

The Active Trader Market

3

Market Trends and Major Market Players

8

 

Market Snapshot

8

 

Active Trader Brokerage Taxonomy

12

 

Active Trader Tools and Differentiators

13

Outlook

18

Leveraging Celent’s Expertise

19

 

Support for Financial Institutions

19

 

Support for Vendors

19

Related Celent Research

20

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