Brokers Must Add Value to Online Trading
These days stock tips come from multiple sources, and people of all ages and socioeconomic levels are listening. Chat-room banter about investing is common. Yet, just like the offline world, unqualified "experts" and outright scammers abound, so it's critical to consider the source.
Still the Web has allowed us to be a bit more daring with our dollars. Part of the lure is eliminating the middleman -- in this case, the broker. And brokers -- be they financial, insurance or real estate -- are feeling the pressure to do something to preserve their positions as authoritative go-betweens for retail and commercial clients.
Rather than feel threatened by the onset of independent Internet investing, the smarter brokerages are taking advantage of the Web as the interactive communications medium that it is. They're evolving their service offerings to keep their feet in the door, even as customers keep their hands on the mouse.
What's critical in financial services Web site design is ease of use. Brokers have to be as clear on their Web sites as they are when sitting across the proverbial kitchen table. Although it's more common for people to check out a financial services Web site for investment ideas, such visitors need to be greeted with simple language and unimposing images. Cold corporate graphics do little more than convey the wealth of the broker, yet unprofessional-looking sites suggest fly-by-night operations with little hope of coaxing trust, let alone trust funds, from customers.
A moderate approach is best, one that illustrates legitimacy while speaking directly to its intended audience. Knowing your audience, of course, is key and will dictate design and copy elements every step of the way. Senior citizens have perennially been the targets of brokers both honest and less than honest. Yet by and large, the Internet has sharpened the investing skills of seniors, and brokers would be wise to meet them halfway in cyberspace.
One full-service securities firm that specializes in municipal bonds recently redesigned its Web site to make it accessible enough for seniors without making the content too rudimentary. The results have been positive: Traffic on the site increased, and feedback from the predominantly senior visitors is shaping future products and services. For instance, the company is planning to offer its customers the ability to view their accounts via the Web site, a time-saving tool for people of any age.
While it's still dangerous to not to consult with a broker when investing, banking or borrowing, many people have been emboldened by having access to information previously kept from them. Facilitating this are Web sites that have adopted the Consumer Reports-style method of simply providing choices to people so they can comparison shop. When it comes to lending money, some lenders would like to remove brokers from the equation. Internet borrowing enables online brokering and saves lenders money by avoiding broker commissions.
At first glance, this seems helpful, but again one must consider the source (or sources). Many times companies pay to have their wares posted on the Web. So while some loans may look best among those on a given Web page, the better deal may still be out there, just a few clicks away.
Regardless, while these sites may feature information from paid participating companies, they are perceived as being unbiased, and that perception leaves brokers out of the mix. Therefore, in the new scheme of things, brokers will need to create a new position for themselves because people are now able to become their own brokers, comparing interest rates, points and terms.
Permission marketing, or asking Web site visitors or e-mail recipients if they would like to receive information from a specific company, is a major trend that can have value for both companies and clients.
Financial services companies are conducting permission marketing by requesting to sell customer names to other applicable services, such as real estate agencies and life insurance providers. This will work only if financial services companies can show a benefit and offer more of a community/partnership feel. The goal is to add value to a customer's online experience and alleviate the uncertainty one invariably feels when doing business on the Web.
Of course, financial services firms are going to use the data they collect by giving people access to their accounts to better market to them. While the uninitiated may be uncomfortable with such tactics, it's unlikely to change. Brokers should be leading the way by developing high-quality, integrated campaigns tied to their respective Web sites to make customers and potential virtual world customers feel the same sense of security they've felt with them in the real world.