Online Investing: Online Investing Market Grows by 73% in 1998; Online Investors Expect Impact to be Felt by Full Service and Discount Firms - Internet/Web/Online Service Information

Edge: Work-Group Computing Report, Feb 15, 1999

NFO Worldwide, Inc. (NFO) Interactive reported Thursday that the number of online investors within the United States increased by 2.2 million to more than 5.2 million during 1998. "The online investing market has grown quickly due to many compounding factors" says Lee Smith, Vice President of Marketing and Business Development.

"Overall, the number of online households grew from nearly 26 million to more than 33 million during 1998. Concurrently, the percentage of online investors also increased from 11% to 16%. Clearly, the online brokerage industry is experiencing multi-dimensional growth." In the same report, NFO also revealed that average trading levels among online investors increased by 18%. During the same period, online households that do not invest online, decreased their average trading levels by 49%. "With online investors conducting nearly 88% of their transactions via the online channel, the online investing industry is well positioned for significant growth," says Mr. Smith. "While a portion of the online trading levels represent new activity, much comes at the expense of traditional investing firms," says Mr. Smith. The NFO report reveals that 48% of all online investors stated their online investing resulted in lower activity levels with their Full Service companies. Similarly, 38% of all online investors indicated lower Discount firm activity levels for the same reason. "With nearly 55% of all online investors believing their dependence on a Full Service or Discount investing company will decrease, additional structural changes within the investing industry are imminent. Many more companies will be forced to consider online investing as an integral component of their business strategy," says Mr. Smith. The NFO study, "Online Brokerage Market: Consumers, Web Sites & Competition, Second Edition" was conducted in December, 1998 among 1,547 online households--including 767 online investors. The study provides an in-depth review of online investor demographics, behaviors, and attitudes with trended information from January, 1998. The study also compares investors' opinions regarding the Web sites of Ameritrade, Charles Schwab, DATEK, DLJ Direct, E.TRADE, Fidelity, Waterhouse, and others along more than 20 dimensions. The participants were acquired from NFO//net.source, the world's largest representative online consumer panel consisting of more than 450,000 individuals. Among online investors, the collected data possesses a statistical accuracy of /- 3.54%. NFO Worldwide, Inc. is a leading provider of research-based, marketing information and counsel to the worldwide business community. With over 12,000 full and part-time employees operating in 31 countries; in-depth expertise in all research methodologies; and in-field marketing experience across multiple market sectors, NFO provides clients with trusted insight into the behaviors, attitudes and opinions of customers around the globe. Key services include comprehensive counsel on market evaluation, product development, brand management, customer satisfaction, pricing, distribution, and advertising effectiveness. The Company delivers custom and syndicated marketing information and counsel to over 3,000 clients in key market sectors such as packaged goods and foods, healthcare, financial services, high-tech/telecommunications, travel & leisure and business to business. NFO is the largest custom marketing research firm in the U.S., and among the top three in the world. FMI: http://www.nfor.com.