Although an increasing number of Internet users have turned to the Web tomake sense of wild stock market swings in recent months, many consumer investorshave grown dissatisfied with financial services sites, according to a report released Tuesday by Gartner Group-owned research firm cPulse.
By the third quarter of2000, 40 percent of those polled said they were extremely satisfied with investment sites. However, at the end of the same quarter, slightly less than 32 percent said they were satisfied.
“It appears that swings in the market over the last three quarters havecaused consumers to be even hungrier for up-to-date, fact-rich research thatcould help guide their financial decision making,” said cPulse analyst EricRudich.
Rudich added, “As the market worsened, consumers have become increasingly criticalof the sites they relied on for financial support.”
Site Loyalty Down
The cPulse study also found that customer loyalty to financial content-based siteshas seen a steady downturn.
In the middle of last summer, the report rated roughly 16 percent of respondents as loyal to a particular site. By the end of September that number had dropped to 10 percent.
Content is Capital
cPulse found that “irrelevant information” was the leading reason for the defections and the primary cause of customer dissatisfaction with investing sites.
The report also said that pertinent and useful content was a key factor ingenerating loyalty among users to a particular site.
However, as the tech-heavy Nasdaq nose-dived, causing massive revaluationamong formerly high-flying stocks, investors were hard-pressed to find richresearch and timely advice, said cPulse.
“Apparently consumers were demanding more and more of their financial sitesand they became more than just a place to check stock quotes or makepurchases,” said cPulse executive vice president Jody Dodson.
What Investors Want
The study recommends that investing content sites offer as much historical content online as is availableoffline, in order to bolster their consumer ratings.
In addition, the study recommends that investment sites offer more analyst-level perspective, including comprehensiveperformance analysis and news coverage. cPulse also said that consumers are interested in online tutorials that explain how to use the financial information being provided.
Brokerages Feel Pinch
Many high-profile Internet brokerages have been caught up in the meteoric rise and fall of the market, and the subsequent trading pull-back by wary investors.
On Monday, Ameritrade cited a downturn in the growth of online trading when it slashed 230 full-time employees, or roughly 9 percent of the firm’sworkforce, as well as 100 temporary positions. The company also said that itexpects to incur a larger-than-expected loss for the first quarter.
Meanwhile, on Sunday, Morgan Online, the banking site of J.P. Morgan Chase & Co., said it was laying off roughly 150 employees in sales, marketingand client acquisition.
In addition, last month, Charles Schwab said it had instituted a hiring freeze andwould temporarily freeze the salaries of hundreds of its top executivesuntil market conditions take an upturn.