A reader sent an e-mail this week complaining about poor service from
online broker Wit Capital, which offered its own IPO last Friday.
“I have an account there, and tried twice to buy IPO shares, but was
blocked,” the reader writes. Worse, he adds, “they never answer my
emails, faxes, letters. If you call, you have to wait hours on the
phone, then they say all they can do is take a message. Something is
seriously wrong.”
To be fair, it’s not just Wit. I’ve heard and read complaints about
service and slow transaction processing by several online brokers. While
many online investors are happy with their brokers, others are still
shopping around, trying their best to figure out which company should
get their business.
The trouble is, barring their own personal experiences, most investors
must rely on anecdotal evidence and (even worse) marketing claims to
sort out the market.
Now an Internet performance measuring company has developed a weekly
index that measures how fast 15 online trading sites complete stock buy
orders and how easy it is to successfully submit an order.
(Unfortunately,
Wit Capital is not included in the listing.)
Keynote Systems’ Web Broker Trading Index debuted this week with results
from their analysis of online stock transactions conducted from June 1-4
in 10 major metropolitan areas.
The index shows that Dreyfus had the fastest processing time, at 7.47
seconds per transaction, barely ahead of runner-up Scottrade. On the
other end of the list, laggards E*TRADE and Ameritrade turned in times
of 38.35 and 37.44 seconds, respectively. The index average was 25.24
seconds per transaction.
In terms of transaction success rate – the ratio of successful to
attempted transactions – the best online broker last week was Brown &
Co., which completed 99.3%. Scottrade was runner-up in this category
as well, with a 97.9% rate.
Suretrade was a disaster. Only 46.7% of attempted transactions on
Suretrade by Keynote’s program were successful, far behind even the No.
14 finisher, E*TRADE, which had an 80.5% transaction success rate.
(Keynote defines unsuccessful transactions as those in which any Web
page fails to download completely or those that exceed a time limit of
12 seconds per Web page involved in the transaction.)
Obviously the index is a promotional tool for Keynote, which markets
e-commerce measurement, diagnostic and consulting services. But it also
provides a potentially valuable research tool for online investors, and
will serve as a reality check to online brokers carried away by their
own hype. Other Web brokers will be added to the index in ensuing weeks
(including, hopefully, Wit Capital).
Keynote, based in San Mateo, Calif., will keep weekly results of its broker survey postedon its Web site.
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