German Online Brokers Are Europe's Best, Blue Sky Says

PARIS — German online brokers offer the best and most comprehensive service to investors on the Web in Europe.

Blue Sky Ratings, a US investment survey firm located here, came to that conclusion in its most recent report. “It came as a surprise to us to see how creative the Germans are,” said CEO Suzanne Nolan.

“This goes against the conventional wisdom that holds the UK is the most advanced financial market in Europe — which it is on the ground, certainly it is the largest one, but in online activity it is not as advanced as Germany.”

Advanced, she said, means factors such as the number of transactional sites available, the offerings and the ease of use. “What the Germans do better than the Brits or the Americans is access to multiple global markets.”

She cited Comdirect, a German online broker, as the best in the business. “It has a higher level of customization and personalization and goes beyond just picking headlines from news sources.”

Instead, the company offers investors two different views of available information. One provides quick headlines about companies an investor wants to track, while another gives more detailed information when he has more time to think and study.

“What is neat about them is their way of presenting information not only to customer interests but how they feel at any given moment — headlines or time to study. You don't get that kind of dual view on US sites.”

Comdirect is so good, she said, that the company ranks third in the UK, behind E*Trade and Schwab.

“They give you tools for analyzing stocks by sector and region so that if you want to buy telecom stock, they provide tools to compare performance of different stocks,” Nolan said.

“It takes one click to get a historical chart, another to find ways of putting that information together simply and clearly and in easy-to-use form.”

German sites also offer real-time access to world markets, something only one UK-based broker does by letting people trade in London and New York on one screen. But Nolan described its procedure as “clunky.”

The Germans, she said, “are developing an expertise in multiple-market trading that has gone way beyond what Americans offer in the US or what Americans and British offer in the UK.

“Comdirect can access 43 exchanges and Direkt Anlage 18. In the UK you have E*Trade, which can get you onto four markets — two in London, and NYSE and Nasdaq in New York. And that's not done in real time.

“What happens in much of the trading is putting an order on site and then having it move through the system to third parties, then to the exchange and then back, and that can take from 30 minutes to two hours. Germans can do it in real time — three [seconds] to 60 seconds.”

Blue Sky was launched in the US but moved three years ago to Paris, where it now employs 15 people to track retail banking and retail brokerage activities across nine European countries and US brokers in Europe.

“What US companies needed to know was where to go and what to do to either meet or beat competition, so they had to know what the competition was doing, what the gaps were, what they can do and locals can't, and what makes locals tick,” Nolan said. “And that's what we do.”

In the beginning, Blue Sky had mostly US companies as clients. That has shifted. Half the value comes from the Americans, because they spend more money. But in terms of volume, only one in four companies is US-based, she said.

Blue Sky studies the activities of 200 brokers in 500 categories. “You have to cover that many because brokerage sites are built up of a net of tiny details that go to support client decisions,” Nolan said.

“That's why we have to break the information down into tiny bits so you can map the competition clearly and decide what you spend your money on. Our clients don't have the time to spend all day looking at a Web site.”

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