Onlinebrokersector

Web Site Analysis Project: The On-Line Broker Sector 1 Instructor: Dr. Deepak Khazanchi Authors: Students from Electronic Commerce class, Spring 2001

WEB SITE ANALYSIS PROJECT


TABLE OF CONTENTS

THE WEB SITE ANALYSIS 1

EXECUTIVE SUMMARY 3

INTRODUCTION 6

BACKGROUND 6

SCOPE 6

THE WEB SITE ANALYSIS TEAM MEMBERS 7

ACTION PLAN 8

MANAGEMENT PLAN 10

ESTABLISHED CRITERIA 10

RECOMMENDATIONS 11

TECHNICAL DIMENSIONS 12

BUSINESS EVALUATIONS 18

CONCLUSIONS 21

APPENDICES 22

WORKS CITED 23


EXECUTIVE SUMMARY

In this analysis, the E-Commerce web site analysis team consisting of Andre

Andikasim, Adrienne Madden, and John Dawdy, were asked to browse the home pages

of companies to identify twenty to twenty-five firms within On-line Broker industry and

narrow down the best sites based on designed, layout, structure, and usefulness of the

Web sites.

The Web Site Analysis (WSA) consists of:

?? background information;

?? action plan;

?? management plan;

?? technical dimension;

?? business evaluation;

?? recommendations and;

?? other documents that pertain to the completion of the WSA.

Action Plan

The action plan consists of eight processes of implementing necessary steps for

the completion of the analysis. The team members will individually analyze the web

sites and evaluate them in a variety of ways. This approach will enable each member to

gain a broad perspective on the entire analysis project.


Management Plan

The management plan consists of three major components. The first component

establishes the criteria for evaluation of the web sites. The second major component is a

list of minimum criteria for technical dimensions and business evaluations. Finally, the

third major component of the management plan describes the recommendation plan for

evaluating and choosing the best web sites within the On-line Broker industry.

Technical Dimension

The technical dimension is consists of the lists of criteria based on the technical

side of the analysis content which the team will be using in evaluating, comparing, and

referencing the online broker web sites. Also, it describes further how the team

narrowed the web sites to top ten web sites.

Business Evaluation

The technical dimension is consists of the lists of criteria based on the business or

commercial side of the analysis content which the team will be using in evaluating,

comparing, and referencing the online broker web sites. Also, it describes further how

the team narrowed the web sites to top ten web sites.


Recommendation

The Web Site Analysis team has decided to recommend the top ten On-line

Broker Web sites. The top ten Web sites are ranked based on the criteria provided in the

technical dimensions side. The WSA team also recommended the top five On-line

Broker Web sites based on the commercial side or business evaluations criteria. The

recommended top ten and top five web sites are presented in the appendices section.

Other Documents

Other documents consist of ranking sheets for the top ten and the top five web

sites, as well as pages and printouts that were pulled from the online brokers web sites to

reference all of the analysis.


INTRODUCTION

Background

A Web site is part of your company’s health. It can provide marketing,

communications, sales, and support arms that reach out to a constantly expanding

audience. If it does not function efficiently, it can hurt the company. The Web site must

be properly designed, maintained and marketed. The best way to become familiar with

good and poor designs is to examine them. The Web Site Analysis is the best way to

evaluate and examine the web sites. For this project we were asked to evaluate web sites

within the On-Line Broker industry.

Scope

The Web Site Analysis team must consider the following issues:

?? the process of how to chose the 10 web sites within the industry;

?? the criteria are given to analyze, evaluate, and compare for the web sites;

?? analyze the web sites based on technical evaluations;

?? rank 10 web sites based on technical evaluations;

?? analyze the web sites based on business dimensions;

?? rank 5 web sites based on business dimensions;

?? write a conclusions section summarizing the analysis and;

?? provide references for our report.


The Web Site Analysis Team Members

?? Andre Andikasim

?? Adrienne Madden

?? John Dawdy


ACTION PLAN

To begin the process of evaluating and narrowing down the web sites, the team

members will ind ividually analyze the web sites and research a variety of options. This

approach will enable each member to gain a broad perspective on the entire project.

1. The team will probably have to start with at least 20-25 web sites and narrow

them down to the ten needed for this report.

2. After conducting individual research and analysis, members will meet to compare

ideas, information, and research methodology.

3. If enough information has been gathered to make informed decisions, the team

will proceed in making a final recommendation. Otherwise, members will

continue to discuss findings and decide what needs to be done to complete the

research process.

4. If necessary at this point, the team will then be broken into two focus groups to

specifically concentrate on the areas of technical dimension and business

evaluation, and preparing the proposal.

5. The technical dimension individual will choose 10 different web sites and do a

comparative analysis on which web site is suitable. Furthermore, the individual

will describe the ease of use of the particular web site, evaluate the design and

layout of the web sites, as well as how the companies use to the full extent of

capabilities that Internet could offer, and other relevant issues that could affect the

completion of this evaluation.


6. The business evaluation individual will analyze the web sites according to

potential benefits, summarize the strategies that the firms implemented, determine

which method the sites used for security and payment, and other relevant issues

that necessity for the completion of this evaluation.

7. When the group has received all of the information they will put together the

analysis. One group member will write the paper, and the other will put together

the evaluations and edit the final result.

8. When the proposal is finished the results will be submitted.


MANAGEMENT PLAN

Established Criteria

After deciding and choosing which web sites would meet the needs for our

evaluations, the group members of the E-Commerce Web Site Analysis project were

given the following list of minimum criteria for technical dimension and business

evaluation.

Technical Dimension Criteria

?? Content: describes the usefulness of the information included at the company's

Web site.

?? Ease of use: describes how easy or difficult it is to view information (text,

graphics, video, animation, audio) and to navigate between the home page and

other pages constituting the company's web site.

?? Design and layout: evaluates the extent to which the creation of the pages

effectively and attractively illustrates and informs the viewer about the company

and its products and services.

?? Use of Internet/WWW capabilities: the extent to which the company utilized

the features and capabilities of the World Wide Web in presenting information

about itself and its products or services.

?? Any other relevant criteria (e.g., states vs. dynamic content)


Business Evaluation Criteria

?? Benefits: analyze the web sites according to potential benefits discussed in your

textbook and/or information based on your textbook, other articles, and class

discussions.

?? Web strategies: summarize the Web strategies you think the firms are

implementing.

?? Security and payment: Which payment methods are available? Would

customers be willing to pay via the Internet for purchased goods on these web

sites? How comfortable are you with regards to the security of payment and other

information being transmitted over the Internet? Why? Would you buy goods or

services from these companies? Why or Why not?

?? Other relevant issues (e.g., search engine success, after sale services,

customization/personalization, stickiness issues)

Recommendation

The E-Commerce Web Site Analysis team has decided to recommend the top ten

of the online broker web sites. The top ten web sites are ranked based on the criteria

provided in the technical dimensions side. The WSA team also recommended the top

five of the online brokers web sites based on the commercial side or business evaluations

criteria. The recommended top ten and top five web sites are presented in the appendices

section.


TECHNICAL DIMENSIONS

The technical dimensions of the financial web sites we analyzed included how

easy it was to navigate between pages and how useful and timely the information

provided to customers is on these web sites. We had several key criteria for evaluating

the sites. First the online brokers must offer unlimited free real-time quotes, provide

wireless trading capabilities, and allow a customer and/or prospect submit an application

online. The online brokers need to offer online pre or after hours trading, have some type

of demo on how to set up and use an online account. The design and layout must be easy

to follow from left to right and clients should not have to search in-depth for key

information. Also the sites must incorporate World Wide Web features such as account

transfers and real-time quote information.

Top 10 Online Brokers

Initially we examined 15-20 Brokers that provide online services.

We narrowed our search based on how easy it was to gather information and the general

layout of the site. If you had to search for key services the site was judged to be poor. If

customers had to spend too much time looking for basic information then they would

probably find the site frustrating. Also the information had to be timely and provide

access to accounts on a 24/7 basis. The Brokers would have to offer customers several

means of actively trading and gathering information. For instance, wireless and tough-

tone features were a must. Finally the online brokers had to provide a wide variety of

services that would compliment trading stocks and bonds online. The sites would have to


provide a ‘one stop shop’ element. Customers would have the opportunity to use other

features such as financial and estate planning, banking, and research, and have access to

customer service 24 hours a day. Listed below are our top ten lists and a synopsis of what

features we liked and disliked on each site.

?? Ameritrade: Ameritrade has wireless trading, pre and after-hours trading, and a

stock-screening tool to assist its customers. Ameritrade also offers 24/7 telephone

customer service and, finally, Ameritrade is one of the cheaper online brokers

with $8 trades. But Ameritrade Does not provide any tax-lot accounting and real-

time streaming quotes. Ameritrade’s web page is very plain and customers have

to really search for key features.

?? Fidelity: Fidelity offers access to Nasdaq Level II quotes, pre and after-hours

trading online and wireless trading from multiple devices. Access to quality

information is a priority as the site provides real-time account information,

Fidelity allows investors to personalize their own home page, and the web site is

easy to navigate. Fidelity also has automated portfolio performance analysis. One

main shortcoming of the web site is the commission cost. The dynamic features

on their pages have to be manually updated; they do not update quotes

automatically.

?? Merrill Lynch: ML Direct provides solid integration between quotes and trading

and it even offers intelligent defaults to trade from mutual fund research. The site

is a one stop shop that offers customers a variety of investment products including

CD’s, stocks, mutual funds, bonds, and Initial Public Offerings Their customer

service is available 24/7, and they provide online bill-pay functionality. Again,


like Fidelity, the commission cost is high at $29.95 on all online orders up to

1,000 shares. Finally ML Direct does not offer after-hours trading, or wireless

access to stock information.

?? Datek Online: Datek offers real- time account information and $9.99 trades on

market and limit orders up to 5,000 shares. The firm also offers online pre- and

after-hours trading and electronic confirmations. But Datek does not offer

automated portfolio performance, alternative trading channels such as automated

telephone trading and wireless access to stock information.

?? Charles Schwab: Schwab offers investors a site that includes tight integration

among quotes, charts, research and trading. Schwab offers real-time account info

and automated performance analytics. Schwab also offers institutional research.

The firm offers one of the most extensive branch networks in the country and

provides timely and accurate telephone customer service. But Schwab has yet to

provide advanced market data, which can be found through Schwab’s Velocity

software and CyberCorp1 trading platform. Commissions, however, are among the

highest in the industry but the services Schwab offers justify the high commission

rate if you are a serious investor.

?? CSFBDirect: CSFBDirect provides a comprehensive stock and mutual fund

screener (over 9,500 stocks and 7,500 funds)2 and allows clients to transfer assets

from another financial institution to an existing CSFBDirect account as well as

track the status of the transfer online. The firm has a 24/7 telephone customer

1 www.schwab.com 2 www.csfbdirect.com


service, but CSFBDirect does not allow client to perform key goal financial

planning tools online. For instance bill payment is not available via the web.

?? Suretrade: Suretrade provides clients with real-time account information, online

after-hours trading and wireless trading. Prospects are provided with a useful

interactive demo that allows them to test drive the site as well as gain immediate

access to the site after opening an account. But Suretrade, like CSFBDirect, lacks

key financial planning tools that make trading easier for clients. Finally, Suretrade

does not offer NASDAQ Level II quotes which will deter serious investors.

?? E*Trade: Hyper-Active Traders will like automated profit and loss calculations of

held positions, premium customer service teams for quick responses, NASDAQ

Level II quotes, the ability to cue up trades and reduced commissions. They also

have an extensive ATM network and are beginning to build their offline presence

in conjunction with Super Target Centers3. But E*Trade lacks financial planning

tools that allow client to plan for retirement, college and estate planning.

?? TD Waterhouse: TD Waterhouse allows investors to transfer money online into

their brokerage accounts from their checking or savings accounts. Investors

looking for a little professional advice can be referred to a Registered Investment

Advisor (RIA) for a no cost, no obligation meeting through the firm’s

AdvisorDirect program4. But TD Waterhouse has yet to offer an advanced market

data package with features such as NASDAQ Level II quotes and express order

3 www.etrade.com 4 www.tdwaterhouse.com


entry. The site still lacks real- time account balances and automated portfolio

performance information.

?? American Express: American Express provides direct access to its mutual fund

and stock screener from its brokerage homepage, in addition to unlimited

transaction history. American Express also offers solid educational content and a

new brokerage challenge investment game. But American Express fails to provide

wireless and extended hours trading to its clients. The firm uses real-time quote

banks and has yet to add online bond trading.

Top 5 Online Brokers

To be considered for our top five choices the online broker listed above had to

meet several criteria. First, they had to offer a wide variety of services for customers.

These services need to encompass the brokerage services, for instance, banking,

retirement, and estate planning. The brokers also needed to provide customers with multi-

access to their account information. Customers can access account data through wireless

and touch-tone capabilities, customers also need 24/7 customer service and extended hour

trading. These seem to be key features that separate average sites from above average

sites. Also the sites had to offer free trades and access to free information before

customers commit to the online broker. Most sites enticed investors with $ 75 to $100 in

“free” money to open an account. The use of product demonstrations was a key feature

that caught our eye. This allows potential clients to test the online services before the

commit. Next was reasonable pricing. Some brokers were pricier than others but the


pricier sites had more to offer customers and the costs were justified. Based on these

criteria we narrowed our list to:

?? Charles Schwab

?? E*trade

?? TD Waterhouse

?? Fidelity

?? CSFB Direct

These company’s sites were easy to navigate and offered useful information. They

displayed their information in a manner that was easy for investors to follow. Some of the

brokers had better features than others but overall they had technically and commercially

sound web sites.


BUSINESS EVALUATIONS

Benefits: The benefits of offering investments online are enormous and simple. These

investing companies are able to gain a broader and more dynamic customer by offering

24x7 investing, real-time quotes, smaller fees, and automation. The market is no longer

limited to top-heavy investors and therefore has expanded into a new market for the

slightly meeker consumer. The limitations of the old value chain have diminished, and

new links have since been welded.

Web strategies: Online investing has established itself as a credible, profitable, and

marketable business venture. These companies have generally targeted customers who

are serious about their money. With minimum investments ranging from an average of

$2,000.00, such as with Ameritrade? , to companies like Schwab? requiring $5,000.00,

these investors don’t want to dabble in what they see as insignificant funds.

All of these companies share a common platform by offering such items as online

personal accounts, limited investment advice, 24x7 support, up-to-date stock information,

standard encryption security, demos and tours, and promotional “eye candy”. Some of

these companies, such as Fidelity? , master these tools; however, the consumer pays a

silver penny in return for excellence.

As companies grow, they are stretching to the same apex of quality, functionality, and

value. If one company meets the needs of an open market, the others scramble to play on

the same field. About half of the investors we reviewed had services for wireless trading,


bill paying, after hours trading, investing tools, real-time accounts, and automated

portfolios. The common strategy to this business environment is to make loads of money

by attracting serious investors, offering all the bells and whistles, while providing

security, functionality, and ease of use.

Security and payment: Our entire top ten selections include flexible methods of

depositing currency into a personal account. These include electronic fund transfers

(EFT) from other investing companies and banks, personal checks, money orders, and

automated withdrawals from paychecks and other accounts. These companies made it

very accommodating for anyone wanting to invest to do so. Because of the encryption

and secure socket layer technology (SSL), most people find it incredibly painless to

invest online. If they aren’t comfortable, all of these investment companies offer

investment by mail or office services. We feel very comfortable using these services

online. A great deal of care has been taken to provide security and assurance to their

customers. We would say that the success of these companies has proven the success of

their online strategy.

We think that the average investor would go with the more affordable companies such as

Ameritrade? , Datek? , Suretrade? , TD Waterhouse? , and Fidelity? . Personally, it would

be a combination of low fees mixed with small minimum investments.

Other Related Issues: All of the sites offered very good stock quote search engines, but

only Fidelity? , Datek? , and E*Trade? offered exceptional site search engines. Most of


the pages were very clumsy and hard to navigate. Since “stickiness” isn’t really a

primary goal here, this may be their form of “stickiness”- they’ll keep you searching on

their site for as long as it takes.

This type of web environment thrives on customer service before, during, and after all the

transactions. With 24/7 telephone and e-mail support, e-mail follow-ups, and teaching

investments guides, these companies want to give you the ammunition to succeed. Your

success means their profits.


CONCLUSION

The Web Site Analysis team has decided to present Dr. Deepak Khazanchi with

the top ten Web sites within the On-Line Broker Industry. A lot of time and research has

been put into ranking and evaluating these web sites based on the criterion that was listed

on our management plan. Our top ten and top five Web sites meet the initial criteria and

most importantly fall within the established criteria. The final ranking of the top ten Web

sites based on technical dimensions and business evaluation analysis for the On-Line

Brokers Web sites are listed in the appendices. The web sites that were used for research

are listed in the works cited page.


APPENDICES

The final ranking of the top ten On-line Broker Web sites based on the technical

dimensions are referenced in the appendices. The top five On-line Broker Web sites

based on the business side evaluation are also referenced in the appendices. Additional

pages or printouts that were pulled from the web sites were also listed on the work-cited

page. The information is necessary in the completion of this project.


WORKS CITED www.schwab.com, accessed site January 29, 2001 - February 19, 2001. www.ameritrade.com, accessed site January 29, 2001 - February 19, 2001. www.csfbdirect.com, accessed site January 29, 2001 - February 19, 2001. www.etrade.com, accessed site January 29, 2001 - February 19, 2001. www.datek.com, accessed site January 29, 2001 - February 19, 2001. www.fidelity.com, accessed site February 04, 2001 - February 19, 2001. www.mldirect.ml.com, accessed site January 29, 2001 - February 19, 2001. www.jboxford.com, accessed site January 29, 2001 - February 17, 2001. www.quickandreilly.com, accessed site February 05, 2001 - February 17, 2001. www.suretrade.com, accessed site January 29, 2001 - February 19, 2001. www.tdwaterhouse.com, accessed site January 29, 2001 - February 19, 2001. finance.americanexpress.com, accessed site January 29, 2001 - February 17, 2001. www.ndb.com, accessed site January 29, 2001 - February 16, 2001. www.siebertnet.com, accessed site January 29, 2001 - February 16, 2001. www.mydiscountbroker.com, accessed site January 29, 2001 - February 17, 2001. www.edreyfus.com, accessed site January 29, 2001 - February 17, 2001. www.msdwonline.com, accessed site January 29, 2001 - February 17, 2001. www.abwatley.com, accessed site January 29, 2001 - February 17, 2001. www.scottrade.com, accessed site January 29, 2001 - February 17, 2001. www.gomez.com, accessed site January 29, 2001 - February 17, 2001.


EXHIBIT 1: BUSINESS COMPARISON Minimum

Investment Fees Would You Be

Willing to Deposit Money via Internet?

Security Comfort

Levels & Why

Purchase Their goods or Services

& Why

Search Engine Success

After Sales Service

Customization & Personalization

Stickiness

Fidelity $2,500.00 $14.95 Yes Use of HTTPS secure socket layering

Yes, Reputable Company

There search engine allows advanced searches with a quick response

Built in alerts and educational services

All have an online personal account

Lots of information

Ameritrade $2,000.00 $8.00 Yes Use of HTTPS secure socket layering

Yes, Inexpensive charges, and technical support

No real advanced search option

24x7 e-mail and telephone service


Sweepstakes, Demo

Merrill Lynch

$2,000.00 $29.95 Yes Use of HTTPS secure socket layering

No, Out of my budget

No search options 24x7 e-mail support


Tour, and free research trial

Datek Online

$500.00 $9.99 Yes Use of HTTPS secure socket layering



Electornic confi rmations


Demo

Charles Schwab

$5,000.00 $29.95 Yes Use of HTTPS secure socket layering


No search options 24x7 e-mail and telephone service


Demo

CSFBdirect unkown $20.00 Yes Use of HTTPS secure socket layering




Suretrade No minimum Balance

$7.95 Yes Use of HTTPS secure socket layering




Tour


E*Trade $1,000.00 $20.00 Yes Use of HTTPS secure socket layering



24x7 e-mail and telephone service



EXHIBIT II: TECHNICAL ANALYSIS Rank Company Content Ease of Use Design and Layout Use of Internet CapabilitiesOverall Score Other Criteria Description 1 Fidelity 4 4 5 5 18 Personalized Portfolio

features; After our trading; Wireless capabilities; 24 X 7 Customer Service.

Nice design and layout; also it features several capabilities such as: Personal Portfolio; Search and Quotes; etc.

2 Charles Schwab 4 4 5 5 18 Dynamic content not distracting, Personalized home page available; variety of plans available: College, Estate, and Retirement planning

This site has all of the bells and whistles. Offers investors a full package when It comes to online brokerages. The company's commissions are high but the services available make up for it.

3 TD Waterhouse 4 4 5 5 18 Web banking, Retirement; Estate; and Trust accounts. Extended hours trading; 24 x 7 customer service; Basic investment product: stocks, bonds, mutual funds etc.

Nice web sites the layout and design is easy to follow most of the key or important info investors would be interested in is available on the home page. Customers really do not have to search for key information it is usually 2-3 clicks away. TD waterhouse offers a wide range of services including banking; real estate and retirement information.

4 CSFB Direct 4 4 5 4 17 Generally Static content is web page: Wireless and touch-tone trading available; Access to real-time information;

Nice web page with nice layout. Site is easy to follow and offers customers a wide variety of services to choose from. For instance they have wireless trading and after hour trading. Viable search engines available to research investments; Interactive demonstration of online features.


5 E-Trade 4 4 5 4 17 Bill management options, Financial planning available; Real-time quotes available

This site is well thought out and easy to follow. E*trade offers a full range of financial services from banking; real estate. taxes and college planning.

6 Datek Online 4 4 4 4 16 Extended hours trading, real-time quotes: 24 X 7 Customer service

Nice web page with nice layout. Site is easy to follow and offers customers a wide variety of services to choose from

7 American Express 3 4 4 5 16 24 X 7 Customer service; Online cash management features.

American Express offers a variety of services but the brokerage services are limited. They do not extended hour trading and you cannot trade bonds to date.

8 Merrill Lynch 4 4 3 4 15 Variety to trading options: bonds CD's Mutual funds etc;

Web page very general; but sites does offer clients a wide variety of financial services.

9 Ameritrade 2 3 3 3 11 Wireless capabilities: low commission rates; excellent customer service.

Web page is very plain customers have to really search for valuable information. Demo is not the greatest.

10 Suretrade 3 3 2 3 11 Wireless capabilities: low commission rates; IRA and retirement options.

Suretrade's web page is very plain. They really want to stress their low commission rates. But for serious investors the sites does not have much to offer. Customers really have to search for key information

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