Some Brokerage Firms Not Up to Speed on Net
Although several brokerage firms have recently ventured onto the Internet, some either ignore or don’t respond completely to requests for information from potential customers, according to a study.
San Francisco-based Prophet, a consulting firm, sent 10 messages asking for information on setting up an account to each of eight firms, including Merrill Lynch & Co., PaineWebber Inc., Smith Barney Inc. and Prudential Securities Inc.
The firms didn’t respond, on average, to 37% of the inquiries, the survey found, even as the online broker business has grown.
The brokerage firms “have all jumped into the [Internet] act because they didn’t want to be left behind, but they all acknowledge that the functionality is not where they’d like it to be,” said Navtej Nandra, a partner who consults for financial services firms at Booz, Allen & Hamilton.
Though online trading has been around for only about a year, it already accounts for about 4% of retail trading volume, Nandra said.
Baltimore-based Legg Mason had one of the best response rates, as brokers answered all 10 inquiries, often by regular mail or phone.
Prudential Securities also answered all the e-mail it received, using the Internet for seven of its responses. The others came via phone or mail. Brokers at the fifth-biggest securities firm did the best job of following up their e-mail with a phone call or a letter, the study found.
Among the other firms, Merrill Lynch responded only to four of the 10 inquiries it received and used regular mail. Merrill executives weren’t available for comment.
PaineWebber and Smith Barney each had 80% response rates. Tucker Anthony Inc., based in Boston, answered four of the 10 messages it got, while Robert W. Baird & Co. answered none of the messages it got.
Milwaukee-based Baird pulls up e-mail messages daily and refers them to brokers, said Valerie Klik, head of advertising for the firm. “We are a regional firm, and if someone’s request came from California, maybe the closest office is in Iowa,” so the broker didn’t respond, said Klik, who said she hadn’t seen the study.
