Broker-solicited trades set to revolutionise online brokerage

Broker-solicited trades set to revolutionise online brokerage

Research company Jupiter Media Metrix is predicting a shift from investor-initiated trades to broker-solicited responsive trades online.

Its analysts think that responsive trades, driven by consumers responding to email and wireless promotions, will amount to 100 million trades in 2006. That's nearly 13% of all online trades. And three per cent of online trades will be initiated via mobile Internet services in 2006, say the analysts.

They predict that the shift from investor-initiated to broker-solicited responsive trades will represent a radical change in the way investors use interactive media to manage personal wealth.

Robert Sterling, senior analyst, Jupiter Media Metrix, says: "The online trading field is wide open for reputable brokers and dealers to use secure wireless and e-mail technologies to encourage customers to make responsive trades."

Jupiter forecasts that wireless brokerage transactions will drive approximately $1 billion in commission revenues in 2006 or 17.6% of all online trade commission revenue. But more than 80% of wireless trading revenue will comprise traditional, full-service brokerage activity.

Broker-driven recommendations will be transmitted through secure e-mail, according to Jupiter analysts. There will be options for the clients to make each trade, edit or reject it. Registered representatives will also be able to follow up e-mails with a phone call. Investors can also receive trade recommendations at their work e-mail account, mobile phone or other wireless device.

Registered representatives will become more focused on asset-gathering and relationship management. And it will become increasingly important for employers to streamline the product sales process with labour-saving technology. Enabling representatives to make recommendations and receive trade instructions through electronic messaging will help them to manage accounts more efficiently, according to the report.

Sterling says: "The most important role of wireless data services in broker transactions will be driving responsive trading, rather than user-initiated trades, which make up the majority of online brokerage trades today."

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