A game of numbers, but where’s the money ?
How many customers does an online broker need to start making any money ?
That’s the question that arises from the latest figures released by JP Morgan this week showing registered customers and trades executed during December. The answer seems to be anyone’s guess. While there is no denying the popularity of online trading, how long can this service be subsidised before shareholders demand positive returns ? The banks may answer ‘just long enough for Etrades and Sanfords to be squeezed out’.
The money will come via the independent online brokers expanding to cover a broad range of financial services and banks offering their full range of services via internet, phone and branch. Online trading will be available from those who have developed the technology, for example Hartley Poynton, eStar, Etrade and Sanford Securities.
For consumers the range of online financial services will only continue to grow. You’ll be able to access most, if not all, of your accounts from the one provider and have consolidated statements. Online trading itself, is currently being subsidised so we can expect any movement in brokerage fees to be upward.