Online brokers get personal with tailored service

There are significantly fewer armchair stock brokers than the heady days of 2000 but online brokerage houses are improving their Web sites,according to a Gomez Canada report released Monday.

The Toronto-based company reported an increase in financial planning tools (up 23 per cent in the

last six months), improved customer service and an onus on tools to personalize an investor’s profile and interaction with the site.

The top three houses for the Q3 2002 scorecard are BMO InvestorLine, TD Waterhouse and E*trade, all of which held their rank from the previous report issued six months ago. Gomez analysts highlighted InvestorLine’s asset allocation models and improved analytics as helping it maintain its position on top.

“”We’ve cleaned up some of the usability, we’ve added a very detailed stock screening tool,”” said InvestorLine president and COO Tom Flanagan.The site has also added guaranteed investment certificate (GIC) trading, consolidated news quotes and charting pages, and has expanded the capabilities of its gain and loss engine.

The Gomez report also noted that the online brokerage market is still fiercely competitive, with relative unknown Qtrade jumping three spots in the rankings to No. 4 and Disnat joining the list for the first time at No. 13.

Disnat is a division of Montreal-based Desjardins credit union and is using its distribution channel to add customers, said Disnat vice-president Yves Neron. Neron joined the company in March and said he aims to make some changes to the site over the next six months to attract serious and lifelong investors. (Gomez tracks four types of investors: life goal planners, active traders, serious investors and one-stop shoppers.)

Neron said that investors are looking for real-time portfolio alerts and pricing models that reflect their trading patterns. “”The Web will need to be a lot more relationship-oriented than before (when it was)transactional,”” he said. “”A lot of product will be tailor made to the customer, based on their patterns.””

While InvestorLine has made customization a priority, it hasn’t built a personalized sign-on page yet. “”But that’s certainly well within the parameters of other projects that we’re looking at,”” said Flanagan.

Both investment houses have seen a large drop in customers since 2000, when stock market speculation was rampant. The future of InvestorLine will gear offerings for life goal planners and serious investors. “”It’s a difficult market,”” noted Flanagan. “”Trading volumes are significantly down and slightly down from 2001.””

“”That’s the kind of dilemma we are analyzing right now,”” agreed Neron. But he said that Disnat is seeing some business from investors that have become disenchanted with full service brokers and are moving their portfolios online. “”They are basically saying, ‘Well, I could do better myself.'””


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