Online Competition Hots Up
Despite investors' reluctance to trade on or offline, new players are continuing to enter the online broking market, writes Lynn Strongin Dodds.
TD Waterhouse and Charles Schwab may be laying off people but several new contenders have thrown their hat into this already crowded ring.
This can only turn the heat up for those existing players whose aim this year has not been winning but trying to keep their hard-won client bases.
Hans Georgeson, head of sales and marketing at Barclays Stockbrokers, says: "Last year, there was a conveyor belt of new customers coming onto the market, particularly on the execution side.
"However, this year has been tough. We're not suffering in the same way as some of our competitors, but we are seeing a lot of new competition coming in.
"The name of the game this year is retention. With fewer customers coming through the door, brokers are fighting to attract customers from each other and retain the ones they already have."
To this end, Barclays has taken a closer look at its customer base to ensure it is meeting its requirements. Georgeson says: "We know that roughly 40% of our clients have accounts with other brokers. We did a survey of 2,000 customers to look at why they are dealing with us and what we can do to provide a better service.
"We found that although there is a tremendous focus on price, the three things that clients put at the top of their lists are reliability, speed of execution and the website's ease of use."
Georgeson says the firm has also segmented its client base into active and non-active traders on the online front in order to provide a more tailor-made service. …