Julio Gomez is CEO of the company which carries his name and which is a leader in the field of 'customer experience measurement' in e-commerce. In the investment world, the Gomez ratings of online brokers are highly influential both within the industry and among the traders and investors who use broker services.
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Seek and ye shall find.
A virtual who's who of clicks and bricks and pure-play financial services offer online investment services catering to almost every customer segment and lifestyle need. Like a pair of shoes, you'll need to pick a broker that best fits your needs. This process begins with a basic understanding of your investment profile ('hyperactive investor', 'serious investor', 'life goal planner' and ' one-stop -shopper') and what you value most in an online relationship with a financial services firm (customer confidence, on-site resources, overall costs and relationship services). Then look to see if the broker has the products you need. For example, not all sites offer no load and no fee mutual funds. Some offer options trading, short selling and cash management services. Others don't.
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Parsimony is paramount.
Opening an account should be an easy and straightforward exercise. The account application form should be intuitive and self-explanatory, with a reasonable amount of context-sensitive help to define investment and technical jargon as questions arise. If this isn't the case, it can be indicative of more serious internal business process and customer service shortcomings. Investors who want to trade ASAP, will want to select a broker that handles real-time account transfers via check or credit card.
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Multiple touch points are critical.
Win or lose, online investing can be a solitary endeavor, particularly if you choose a 'go it alone' strategy with a discount or deep discount firm. Even the most self-directed investor, however, will at some point need to contact his brokerage firm. It's therefore essential to have multiple channels for reaching your firm: in person at an office, over the phone or via the net. Reputable firms provide contact information at key junctures of their sites.
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Customer service differentiates leaders from laggards.
Whether you're a first-time investor or a seasoned pro, you may need technical help and other educational materials. Online FAQs, web-based e-mail and telephone support are essential starting points. New approaches are emerging in the form of instant online chat and voice services that enable near instantaneous interaction with customer service reps. Though customer service varies with market activity and firm size and staffing, a golden rule goes something like this: it shouldn't take more than five minutes to reach a customer service rep and five minutes to resolve your question.
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An educated investor is the best investor.
Even deep discount firms have come to the realization that they must offer third-party research from reputable providers and investment planning tools to placate everyone from newbie through veteran investors. Quotes, charts , news, screening tools, and life-event calculators are starters. These tools should generally allow investors to transact directly from the pages on which they reside.
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What you see is what you get.
You wouldn't shop in a store with cluttered aisles . Nor would you put your money in a bank whose vault lacks proper safeguarding. Seeing isn't always believing, but you'll get some sense of the client experience by surfing the public areas of the site. One way to get a good feel is to put the site's trading demo through its paces. If it's easy to use, understandable and fast enough, chances are the site proper is the same way.
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The price must be right.
Fees and commissions must be acceptable to you and your financial circumstances. The only way to gauge this is to know what you're getting for the money spent. Low commission sites normally connote frills-free services. That's fine if you're confident in your investment instincts , have your own trading formula or have access to a wealth of educational tools and educational guides at personal finance portals or other web sites, personal financial management software packages or print publications . Investors who require a little more hand-holding - online or offline - should consider sites with a deeper array of financial planning calculators and research and the opportunity of working with a registered investment advisor. There's a cost associated with this type of service, of course, either in higher commission rates or fee-based services tied to the number of transactions or assets under management.
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Jacks or better ante.
Clearly you have some cash to play with if you're considering opening an online brokerage account. To past muster you'll need to meet the broker's minimum deposit or minimum balance requirements. They vary based on the size of the broker and the market segment targeted . Make sure you read the fine print of the online broker's terms & conditions agreements: many brokers are now hitting clients with inactivity fees.
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Security starts at the home (page).
Online trading is no less secure than trading over the telephone, but you shouldn't trust just anyone with your hard earned cash. You should only trust those firms that properly secure their sites - you can tell by the ' https ' in your browser's address field or the padlock that should appear in the systems tray when you access a so-called secure site area. Also make sure you read the firm's security policy - which hopefully is accessible from the homepage. The firm should clearly articulate its security processes (relating to the site's underlying technology and the firm's business practices). Pay careful attention to fraud guarantees - which like health insurance you hope you'll never need to avail yourself of. Make sure the firm is a member of SIPC (Securities Investor Protection Corp.), or the equivalent (if such exists) in other markets, which protects up to $500,000 in assets.
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Character witnesses are critical.
As with any business deal where money changes hands, you want to know how reputable your prospective broker is before signing on the dotted line. Sure you've seen their commercials, but what do real people like you think? Does the firm pay lip service to privacy or does it jealously guard your personal data like a trusted bodyguard? You might want to consult knowledgeable friends or online message boards . The National Association of Securities Dealers Web site (nasdr.com) offers regulatory insights and details actions pending and taken against specific firms.
