Money: Trading boom takes off on the internet.
Financial information that used to be available only to professionals is now more or less freely available to everyone on the internet.
Shares are also increasingly being traded online. Private investors by themselves can do it all: obtain information and advice, and act on them, electronically. It's fast, and it's cheap. The electronic broker reaps savings, which are passed on to the customer.
America's largest online trader, Charles Schwab, has taken the lead in the UK and has recently announced major expansion plans.
The firm, whose UK headquarters are in Birmingham, is opening a customer service call centre in Milton Keynes. Schwab expects to create 450 new jobs initially in the call centre, rising to 1,200 over the next five years. These totals are in addition to the approximately 500 people currently employed in Birmingham.
In the UK alone, Schwab (http://www.schwab-europe.com) has already handled more than pounds 500m in online trades since launching the service a year ago. Along with several prominent UK and US rivals, Schwab are gearing up for explosive growth.
Schwab already has in excess of 21,000 internet traders, and more are expected. The number of trades being done on the internet is doubling every three months, according to APCIMS, the Association of Private Client Investment Managers and Stockbrokers ((http://www.apcims.co.uk).
Now is a good time to get introduced to internet trading. For the rest of this month, Schwab is offering internet trading that is entirely commission free, although "the cheapest of our three services is touchtone trading," says Guy Knight, vice president, European Marketing.
This service is an execution-only telephone service that is automated, as distinguished from Schwab's execution-only phone service which connects you with a customer-service representative. Internet trading is the third option. On its website, Schwab helpfully provides an online demonstration which gives you a preview of, and enables you to practice, internet trading. The main screen shows your Current Cash Balance, Cash Available to Invest, Current Stock Value, and Amount You Can Invest. It lists the shares in your portfolio, and a separate frame provides links to other sources of information such as Reuters Data and real-time prices. Help screens are also available online.
Schwab currently faces competition from Barclays and Stocktrade, and will soon go up against several other formidable players, including America's E*Trade and Britain's National Westminster, Freeserve and Killik. The latter have just revamped their website (http://www.killik.co.uk) in anticipation of the next round of battle.
On its site, Killik announces that it will soon launch "new internet services - including online dealing. The service will be part of a range of additional services available online, and will allow clients to trade directly with the market during market hours, and send orders through to dealers after hours.
"The charges will be at a 25 per cent commission discount to our 'full service' commission."
Literally dozens of other websites are relevant for online trading. For free daily updates on UK unit trust and Oeics (open-ended investment trust companies), try TrustNet (http://www.trustnet.co.uk). Isas can be bought and sold on the webexpress section of Fidelity's website: http://www.fidelity.co.uk.
Xest is the execution-only electronic share trading unit of Charles Stanley which offers trades on European stockmarkets and the buying and selling of gilts on the internet.
APCIMS estimates that, in slightly more than a year, internet trading has jumped from one in every 1,000 trades to nine per thousand. APCIM believes that "if the growth continues at the same rate, internet trades will account for 15 per cent of all trades by the first quarter of 2000."
According to APCIMS chief executive Angela Knight, this buoyancy "bears out the optimism of the standard-bearers of e-commerce. Many commentators see electronic share dealing as one of the key drivers of the coming e-commerce revolution, and our figures show that this early growth is roughly equal to the growth in the number of internet users, which doubles every 100 days."
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|Publication:||Sunday Mercury (Birmingham, England)|
|Date:||Jul 25, 1999|
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