Clients Online--They're Doing More

What are your clients doing online? RR conducted an exclusive survey of 200 investors to find out (see Tracking Clients, Page 63). They surf the Web for investment ideas, e-mail their brokers and pay bills online. And while more than a third say they have never talked to their broker about their online financial activities, two-thirds say they would like some guidance. Only half now get assistance

What are your clients doing online? RR conducted an exclusive survey of 200 investors to find out (see “Tracking Clients,” Page 63).

They surf the Web for investment ideas, e-mail their brokers and pay bills online. And while more than a third say they have never talked to their broker about their online financial activities, two-thirds say they would like some guidance. Only half now get assistance from their adviser.

Our survey also reveals that clients plan on engaging in more online collaboration and e-mail communications with their brokers.

Life is funny. The Internet is shaping up to be an important tool for full-service brokers. Meanwhile, the online discounters who were going to put traditional firms out of business have turned out to be fair-weather competitors.

Difficult Markets

I rarely pay much heed to the noisy drivel of the popular business media. The assumption — especially with the daily business shows — is that successful investing requires constant attention and action.

So clients might figure they need to do something when markets hiccup. As we report in “What Do We Do Now?” on Page 53, the answer is probably “nothing.” You should definitely communicate with clients about what's going on. Make sure people are seeing their entire portfolio. Make sure they're not fixated on just the 5% of their aggressive-growth assets that fell by half.

Confirm that clients have an appropriate allocation, fix any misjudged risk tolerances and address specific securities that appear to be chronic underperformers.

Otherwise, leave things alone.

NASDR TRO Rule

At press time, the NASDR was promising to make clear that firms cannot impede account transfers. The action is in response to firms seeking court injunctions to prevent clients from following their broker to another firm.

There may be devilish details to come in the promised rule interpretation, so stay tuned. But the NASDR and NASD CEO and President Robert Glauber deserve some credit for addressing this issue. Glauber even opined, “Customers should have the freedom to choose the registered representative and the securities firm that service their brokerage accounts.”

That's heady stuff for a self-regulator. So far, SROs and the SEC have done little to correct the chronic problem of transfer delays. Ending freezes of customer accounts seems like one good step.

Of course, the simplest and most obvious solution is to enforce existing rules that require timely account transfers. An “interpretation” of already clear codes of conduct is a timid half step toward getting firms to follow the rules.

RR Awards

RR scored two American Society of Business Publication Editors awards. Congratulations to Art Director Chuck LaBresh for winning a prize for best opening spread design of October 2000's Sales Assistant section. We were also honored for best signed editorials (the page you're reading). So I thank this fascinating industry for giving me plenty to write about.

Best of luck,

New Estate Planning Column

I'd like to welcome and thank Roy Adams for agreeing to author a regular column on estate planning (see “Asset Titling Tips,” Page 93). Roy's full bio would take up this entire page, so it's not a stretch to call him one of the most respected authorities in the estate planning field. He is a chief contributor and adviser to RR's sister publication, Trusts & Estates, and is a prolific lecturer and author in the area of estate planning.

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