The number of full-service clients with online account access jumped last year, and it's still growing.
“It definitely shot off like a rocket last year,” says Steve Clifford, director of interactive marketing and services at Salomon Smith Barney.
By April 30, the number of SSB clients with online access had grown by 1.1 million to 1.8 million. That's roughly a quarter of SSB's 7.4 million total accounts, compared with just 12% of accounts with online access in December 1999.
Last October, PaineWebber CEO Don Marron said the firm's number of households online had more than doubled to 352,000, from 149,000 at the end of 1999's third quarter. Updated numbers since October are unavailable, and it's unknown what affect the J.C. Bradford acquisition has had.
Meanwhile, Merrill Lynch had 850,000 households online at the end of March this year, up 54% from 553,000 at the same point in 2000. Those numbers include both full-service and Direct (discount) households.
Jaime Punishill, financial services analyst at Forrester Research in Cambridge, Mass., says consumers normally adopt new technologies in stages, so seeing growing numbers now after online access has been available for several years is no surprise. He predicts that 2001 “will be much bigger by a long shot” as online access becomes mainstream.
Clifford agrees, adding that growth in cable modem connections is driving the trend as well.
The Wealthy Watch Their Money
Wealthy people like online account access. “Most firms thought the affluent would want online access last because the personal relationship is so important, but the irony is that they want it first,” says Jaime Punishill, financial services analyst at Forrester Research in Cambridge, Mass. “Rich people like to look at their money.”
Salomon Smith Barney won't give specific numbers, but Steve Clifford, director of interactive marketing and services, says the average SSB household with online access has three times the assets compared with the firmwide average.
PaineWebber CEO Don Marron cited the same trend last October at a technology conference. When PaineWebber started its online service three years earlier, the firm expected it would appeal most to younger clients with smaller accounts. “But, in fact, exactly the opposite happened. It appealed to our wealthiest clients,” Marron said. At the time, PaineWebber's average account was $300,000, but clients with online access had an average of $800,000.
Prudential Securities told RR in March that its online population included more than 250,000 affluent households with an average of $600,000 in assets, and an unspecified number of smaller accounts. The firm debuted its first online account statement service in January 1996. It would not provide updated information. — R.R.