Lessons from Three Decades of Retail Brokerage

January 2, 2002

Abstract

San Francisco, CA, USA January 2, 2002

 

Everyone knows that past experience provides valuable lessons for the future. A review of retail brokerage’s history not only points out useful lessons but also inspires a rational perspective on its current malaise. 

In a new report entitled “ ,” Alenka Grealish, analyst at Celent Communications, provides a twenty-five year retrospective on the industry’s competitive landscape, product and channel innovations, and regulatory landmarks.It outlines enduring lessons that can be drawn from the industry’s past experiences.These lessons can be distilled into three imperatives:

·Do not underestimate the viability of product and channel innovations and investors’ receptiveness to them. There will always be the next “new-new” thing that will differentiate competitors and open the door to new entrants for at least the short-run.

  • Remember that technological acumen is important to remaining competitive, and that product and channel innovations typically translate into lower cost-to-serve and broader market reach—not cannibalization

  •       Expect a merger or acquisition in order to overcome stagnant market and earnings growth. No competitor is too big or too independent to merge.

  • A Table of Contents is available online.

of Celent Communication's Retail Securities & Investments research service can download the report electronically by clicking on the icon to the left.

        

Send mail to info@celent.com with questions or comments about this Web site.

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 operating unit 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

 

San Francisco, CA, USA  January 2, 2002

Return to report Abstract

EXECUTIVE SUMMARY 3
A HISTORY OF ROLLER-COASTER PERFORMANCE 4
1970's: FIRST WAVE OF PRICE COMPETITION AND INNOVATIONS 5
  Lessons in a Nutshell 6
  Price and Channel Innovations as Differentiators 6
1980's: NON-TRADITIONAL PLAYERS RIDE THE BULL TO NEW HEIGHTS 8
  Lessons in a Nutshell 8
  Technological Edge Becomes a Differentiator 9
  Mutual Funds Democratize Investing 9
  All Parties Must Come to an End 10
1990's: RETAIL INVESTORS GRAB THE BULL AND INTERNET BY THE HORNS 11
  Lessons in a Nutshell 12
  Era of Massive Consolidation 13
  Investors Fall in Love With Mutual Funds 15
  Online Trading: The Mouse That Grew into a Lion 16
CONCLUSIONS 23

 

        

Sign in to download reports and access personalized information