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  5. US Online Brokerage Update: The Click and Mortar Evolution Continues

US Online Brokerage Update: The Click and Mortar Evolution Continues

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6 December 2000

Abstract

Boston, MA, USA, December 12, 2000

Commissions for Online Trading Sharply Down Report Published by Celent

In a new report entitled "US Online Brokerage Update: The Click-and-Mortar Evolution Continues," Celent Communications finds that commissions for online trading in Q3 2000 have dropped by over 30% compared to only 2 quarters ago. This reduction is due in part to sharply lower trading volumes, but also because of ever increasing competitive price pressure. This new report by Celent evaluates each of the major online brokerages in the US, eleven in all, and examines how they are adapting to a rapidly changing environment.

A Table of Contents for this report is available online.

Many online discount brokers, once focused on providing low commission trading and little else, are scrambling to add additional products, research and especially new channels to capture mainstream investors in the face of these quickly decreasing commissions. Without these enhanced services, these firms face a dim future: low growth and decreasing market share. Along with the online discount brokers, full-service firms are also moving online in an attempt to capture this lucrative potential customer base.

According to Fritz McCormick of Celent, "The changes taking place in the US online brokerage market represent a significant threat for those firms that do not adapt with the times. No longer focused on early-adopting online investors, the market is increasingly being comprised by mainstream investors. These are investors with an increased desire for financial advice and planning, both online and off, as well as a much higher average account balance."

The report includes a comprehensive overview of the current state of the online brokerage industry in the US. Additionally, each of the main online brokerage firms is closely evaluated, based on strategy, future prospects and current growth metrics. The firms covered in this report include:

Ameritrade Charles Schwab Datek DLJDirect E*Trade Fidelity NDB Scottrade Suretrade TD Waterhouse Web Street
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