• by Gavin O'Malley  @mp_gavin, June 15, 2005

E-tailers the World Wide Web over could learn a thing or two from brokerage sites, according to two companion studies released by Keynote Systems earlier this week.

With an average reliability of 99.5 percent, the brokerage industry's Web site service levels far exceed other industries, Keynote found. In addition, pages that take more than one and a half seconds to download--a time considered first-rate by other online industries--fell well below the standards currently being set by online brokerages.

Keynote attributed the industry's stellar performance to the cutthroat competition for which Wall Street is historically known. "Given the very competitive state of the brokerage industry, performance problems and customer experience frustrations can translate into problems in attracting new investors," Bonny Brown, director of research and public services for Keynote, said in a statement.

Site speed and reliability were key considerations for prospective online investors when evaluating brokerage sites, Keynote reported. The speed and reliability of trade execution on a company's Web site is almost as important to prospects as the commissions and fees charged for trades, it found.

In the study, 83 percent of prospective online investors reported commissions and fees as an important consideration, and 82 percent reported speed and reliability of trade execution as a key consideration. By contrast, the selection of available products and services was a consideration for 60 percent, and investment advice and planning tools were considered by 56 percent.

For the studies--the "Keynote customer experience rankings for brokerage Web sites" and the "Keynote service level rankings for brokerage Web sites"--it evaluated Ameritrade, E*TRADE, Fidelity, HARRISdirect, Merrill Lynch Direct, and Scottrade, among others.

The Keynote "service level rankings" examined service levels on public portions of brokerage sites, testing speed and reliability by running 6,500 simulated interactions with each site. Ameritrade, Schwab, and Scottrade were judged by Keynote to provide the industry's best overall service levels, maintaining excellent performance across ten key factors measured in the study.

In the determining area of site reliability, Schwab and Scottrade were reported as the most reliable sites. Remarkably, Scottrade didn't report a single error for the entire month in which the study was conducted.

Not every online brokerage performed well, however. One site--the identity of which Keynote did not reveal--reported over 20 hours of downtime in the examined month, and had average page download times more than twice the industry average.

In the competition for customers, E*TRADE, Fidelity, and Ameritrade had the most success in converting prospective online investors into customers, according to the study.

E*TRADE rated highly, in part because of its persistent display of security icons and easy access to its privacy policy, Keynote found. Fidelity's intuitive navigation, product categorization, and account descriptions earned it a high ranking from prospective investors.

The biggest grievance that prospective investors expressed when evaluating the sites was poor online demonstrations of the services being offered, or if no demo was offered at all. Twenty-nine percent of all prospective investors in the study raised this issue.

To determine the leaders in customer experience, and other key business success metrics such as customer acquisition, Keynote examined 1,500 prospective online investors as they interacted with leading brokerage sites, and captured more than 250 behavioral and attitudinal data points for each prospect.