These are turbulent times for the wealth management industry, which has been rocked by new regulations and an unsteady economy. As online brokerages search for new ways to build their business, one of their primary focuses should be on offering a broader range of products to be traded, according to a new report from Celent.
The survey looked at the habits of 220 retail investors, 75% of whom are in the U.S and 25% in Canada.
Around 15% of participants in the survey said they would like to start trading internationally, as well as investing in retirement solutions and investment certificates, if these products and services were available through their online platform.
In a further indication that online brokerages should expand their product mix, 12% expressed interest in trading foreign exchange instruments. Unmet demand for vanilla products such as equities, mutual funds, and futures was less than that of more exotic products, Celent noted. Overall, 8% said they would like to trade CFDs, Treasuries and ETFs and 6% want to trade options, commodities and corporate bonds.
The top five trading platforms used by survey participants in the U.S were Fidelity (21%), E*Trade (20%), TD Ameritrade (14%), Scottrade (12%) and Charles Schwab (11%). Around 22% were using a mix of other platforms.
Meanwhile, retail investors reported various barriers in trading futures, fixed income, FX and commodities. A large number perceive futures, fixed income, foreign exchange, and commodities products as too risky to trade, while 30% said their lack of understanding of these products stopped them from trading. As such, firms should focus on investor education, Celent noted.
In a further sign that some brokerages need to revisit their offerings, 34% of participants reported that their firm was not offering banking facilities but 5% claimed that they would leverage banking facilities should they be offered.