NOW, EVEN BIG BROKERS ARE NET BELIEVERS
NETIZENS MAY BE RELUCTANT to buy sofas or TVs over the World Wide Web, but they have no problem snapping up securities. The number of accounts in which investors buy and sell securities on the Net will reach 3 million by the end of 1997, up from 1.5 million in 1996, according to Forrester Research Inc. That's only a sliver of the more than 60 million retail investment accounts in the U.S., but it adds up to around $120 billion in assets managed online. By 2002, online investing is expected to grow to 14.4 million accounts and $688 billion--about 4.6% of all retail investment assets.
That's surprising, considering that just a year ago most traditional brokerage firms thought the Net too immature a vehicle for investing, according to Forrester. What's more, half of the 50 firms surveyed say they are turning a profit or breaking even on their Net accounts, thanks to the efficiency of all-electronic operations. So far, Charles Schwab & Co. and E*Trade--which control some 40% of all online investment accounts--are the leaders. But those companies could be squeezed by new entrants, says Forrester, unless they strengthen online advisory services and expand the financial services they offer into such fields as auto loans and mortgages.
EDITED BY IRA SAGER
Updated Sept. 11, 1997 by bwwebmaster
Copyright 1997, Bloomberg L.P.