Active Investor Market Offers Growth Opportunity For Online Brokerages
The active investor market is an emerging growth opportunity for online brokerages, according to a new report from research firm Celent and Scivantage, a provider of Web-based, front- and middle-office technology solutions to the financial services industry.
Celent estimates that by 2012, the active investor market will reach 16 million investors, making up 40% of the self-directed market.
With continued market uncertainty, an increasing number of retail investors are moving away from managed brokerage relationships and opting for the self-directed model in order to take a more hands-on and active role in the management of their investment future, according to the report, “The Self-Directed Investment Market: A Focus on Active Investors."
Further, access to sophisticated investment products, as well as market volatility, will encourage the active investor segment to grow at a faster rate than the traditional investor segment. Celent projects its growth at 9% by the end of 2010.
A higher trading volume and use of complex trading strategies make the active investor a very profitable segment for online brokerages, Celent noted.
But online brokerages will need to enhance their platforms to remain competitive, the report found.
The most important areas will include more sophisticated trading tools, enhanced educational materials, more social networking features, improved mobile access and improved usability.
“For the active investor segment, the investment experience has become less about the speed and cost of the transaction and more about the quality of service, access to robust functionality and the overall convenience to proactively manage their investments, at anytime and from any place,” said Isabella Fonseca, a senior analyst within Celent’s international group and author of the report. “Those firms that are willing to invest and adapt to client demands will be future industry winners.”
“With advancements in mobile technology and premium trading tools to automated customer service capabilities, technology continues to change the way investors manage their investments and interact with their brokerage provider. Active investors are a driving force behind many of these innovations,” said Joe Stensland, SVP, marketing and products, Scivantage. “Scivantage is committed to being at the forefront of this emerging trend by providing industry-leading solutions which enable our clients to gain a competitive edge."
Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio
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