In these exceptions, which may be a one-time transfer of funds from a 401k to an IRA or to a mutual fund, the financial services firms need to create ethical safeguards to ensure the confidentiality and actual funds themselves are secure. The bottom line is that the financial services firms need to create a highly secure, customized and tightly integrated series of web-based online trading applications and tools to make sure individual investors can work to attain their investment goals.
Improvements for Online Trading as a Self-Service Strategy
There are many opportunities for improvement for Web-based online trading tools, starting with even stronger security specifically on the area of inter-fund transfers and the recording of transactions. Today many of these Web-based online applications store history only for 12 months, and do not provide an audit record back three or five years of all in-account transactions. This lack of multi-year audit capability is a major disadvantage.
The second major area of improvement is in creating more uniformly high value content for the individual investors to make more informed and prudent decisions. Coupled with this issue is the need for better life cycle planning tools specifically aimed at making the decisions of individual investors more clearly made. This area of content and guidance needs major work in the industry of financial services firms today.
The third major area of improvement needed is in the development of better guided selling applications that can be modified to support guided investing strategies by individual investors. This would be a major improvement and would alleviate incorrect decisions by many investors.
Conclusions and Recommendations
It is inevitable that online trading applications will dominate the financial services firms and the industry...
For individual investors the challenge is educating themselves well enough to make sure their investment decisions will get them to their goals. For financial services firms, the challenges of retaining Web-based customers when competing financial services firms are offering comparable services and possibly a higher returns on investments based on their specific approaches to investment guidance is happening today. The bottom line is that individual investors have more control over their funds that ever before, yet in that freedom comes a high level of responsibility to make sure the advice, applications and tools they gain access from financial services firms are in fact the best match with their investment needs.
References
AMR Research (2003) - Configuration is the Heart of Customer Fulfillment for Complex Product Manufacturers. AMR Research Report. Monday March 31, 2003. Retrieved from the Internet on April 19, 2007 at http://lwcresearch.com/filesfordownloads/ConfigurationIstheHeartofCustomerFulfillmentforComplexProductManufacturers.pdf
Columbus (2001) - Defining Your Direction in Guided Selling. AMR Research Report. October, 2001. Retrieved from the Internet on April 19, 2007:
http://www.lwcresearch.com/filesfordownloads/DefiningYourDirectioninGuidedSellin.pdf
Columbus (2002) - the Sell-Side E-Commerce Market: It's All About Integration. AMR Research Report. Monday April 1, 2002. Retrieved from the Internet on April 19, 2007:
http://lwcresearch.com/filesfordownloads/SellSideECommerceMarketIsAllAboutIntegration.pdf
Columbus (2003) - Squeeze the revenue out of your Special Pricing Requests. AMR Research Alert. Tuesday November 11, 2003. Retrieved from the Internet on April 19, 2007:
http://lwcresearch.com/filesfordownloads/SqueezetheRevenueOutofSPRs.pdf
