Online Traders Use Many Sources for Investing

July 17, 2000, Oakbrook Terrace, IL.  
The latest study by the Raddon Financial Group (RFG) shows that households that currently trade online have relationships with an average of 4.6 firms.   RFG’s semi-annual national consumer research study is syndicated by over 200 financial institutions and reports on consumer product pricing and delivery channel behavior.

Survey respondents were asked to cite the types of firms they use when trading online and note if they use multiple firms.  The top five firms cited by the respondents include “Traditional” Online Brokerage Firms with 55% reporting having an account, Mutual Fund Companies with 41%, Full Service Brokers with 39%, Discount Brokers with 36%, and Insured Financial Institutions with 20%. The information indicates that a large percent of the online segment trades through traditional brokerage firms and mutual fund companies. VP of Research, Robert O’Merea points out, “Online trading households have more money to spread across these institutions.  Their investment balances of  $178,000 are 24% higher than the typical household”.

The study also shows that use and interest in online trading has grown.  One-third (32%) of households report that they do not currently trade online but would be interested in doing so.  This proportion has grown considerably since the Fall 1999 survey when 24% of all households stated they would consider trading online.  62% of households report that they are not comfortable with trading online.  This number is down 11% since the fall of 1999 when 73% of households reported not being comfortable with trading online.

RFG’s study also investigated the attributes that are most important to online traders in selecting a company for opening an account.  Respondents were asked to rate the importance of attributes such as Web Site Reliability, Trade Price, Investment Selection, Research Information, 24 Hour Trade Confirmation, Fund Selection, Knowledgeable Employees, and Full Service Branch.  Additionally, RFG’s study identified what the consumer supplier preferences are for an online trading service and details the demographics and profiles of the online trading segments.

For over twenty years RFG has provided custom and syndicated national consumer research to the financial services industry.   This recent study was conducted for over 200 financial institutions.  To receive this complete research study or to subscribe to RFG’s syndicated research, call 800.827.3500 ext. 383.