Nearly one-third of investors who make three or more trades a month via online trading platforms say they will open a new online trading account in the next six months. Cogent Research studied nearly 700 affluent traders who averaged about 10 trades per month and managed an investment portfolio of $830,000 for its report, "Active Trader 2012: Profiling the Affluent Active Trader."
While brokerage provider consideration criteria varies by trader segment, firms that can clearly demonstrate and support perceptions of a "superior trading platform" are most likely to attract Active Traders.
"Traders are very savvy and are seeking relationships with firms that can offer best-in-class trading technology, tools and support," said Meredith Lloyd Rice, senior project director and co-author of the report.
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While firms like E*TRADE, Charles Schwab, Fidelity Investments and TD Ameritrade are most likely to be associated with this attribute, smaller providers like FXCM, Cobra Trading and Interactive Brokers also are likely to be identified, which highlights the fact that no one firm truly owns this brand trait.
In addition to differentiating on "superior trading platform," firms must also communicate key advantages in research/analytic tools and pricing structure. Emphasizing key strengths in these areas is important to both prospective and current clients, especially given that nearly one-third of Active Traders did not place their existing provider in their future account provider consideration set.
"There is a huge opportunity for firms that can clearly communicate their key points of platform differentiation and superiority relative to competitors – however, many firms are missing the mark in reinforcing their status as a leading edge trading solutions provider among existing clients," said Antonio Ferreira, managing director and co-author of the report.
Combined, these insights indicate that firms serving the Active Trader community must continually innovate and communicate core competencies to attract and retain this elite group of investors.
Cogent Research provides custom research, syndicated research products, and evidence-based consulting to leading organizations in the financial services, life sciences, and consumer goods industries.
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