Magazine article American Banker

Study Sees 9 Million Investing On-Line by 2002

Magazine article American Banker

Study Sees 9 Million Investing On-Line by 2002

Article excerpt

No more than 8% of the 109 million total U.S. households will manage brokerage and mutual fund accounts on-line in the next three to five years, according to SRI International's consulting subsidiary.

Given the growth in the use of personal computers and computer-based services, the projection seems modest.

Indeed, at least one other survey, from New York-based Jupiter Communications and Find/SVP, estimates at least 12 million on-line investment households within three years.

However, executives at Menlo Park, Calif.-based SRI said the projection is better news than it appears at first glance.

Since a majority of U.S. households do not hold investment products-such as stocks, bonds or mutual funds-the nine million or so expected to manage investments on-line translates into a customer penetration rate of about 15% after 2000.

In addition, the 8% figure compares favorably to SRI's estimates of consumer use of on-line banking services.

In a report released last month, SRI predicted that no more than 10% of U.S. households will be banking on-line regularly in three to five years.

"With on-line investing, you know there is a much greater focus by the people who have the interest," said Larry Cohen, director of SRI Consulting's consumer financial decisions group. "On-line banking covers a multitude of needs. You are not sure if people want checking, account balances, (or other features)," he said.

SRI executives said people who are both zealous investors and frequent computer users are considered most likely to be "early adopters" of on-line investment products. …

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