The past year was a tricky one for the online brokers in Barron’s 28th annual survey. It put to the test their ability to provide tools and guidance for clients with dramatically different needs.
During the pandemic, brokerage websites brought aboard millions of novice investors, many young and shaped by social media, who had been whipsawed by volatile markets. More-experienced self-directed investors, including those near or in retirement, also had to cope with bearish markets, time-tested strategies that no longer worked, and a host of postpandemic uncertainties. As Anthony Denier, the CEO of fintech Webull, says, “In 2022, the market changed significantly and made it very, very difficult for self-directed investors.”
Online brokerages are on the front lines of investing. They must do more than just provide slick, well-designed apps and ever more powerful trading platforms to experienced investors. They must also offer an array of investment education, tools, and guidelines to neophytes, and, as always, information and data in ways that are quick to locate and easy to digest. And given the times, they must do it across multiple devices, from desktop computers to mobile devices.
Brokerages “can’t rely on self-directed, single-stock customers any longer. You have to diversify your offerings,” Denier says. “We have positioned ourselves to be an educational tool, a learning tool, and an access tool.”