Quarterly Research Conducted by Phoenix Marketing International Among Active Traders Shows that Age Differentiates Traders

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Successful Marketing To Active Traders Requires That Brokerage Firms Understand The Most Important Brand and Platform Criteria That Motivates Younger and Older Traders

“Active traders under age 50 are the group to target with offerings that enhance customer value, such as online trading education seminars and workshops, investment planning services, and unique online trading capabilities designed for the active trader,”

Phoenix Marketing International, one of the top research companies in the U.S., announced today findings from its quarterly study among active traders that expand upon insights presented in October 2012, showing traders’ consideration of online trading platforms (brands) varies by type of brokerage firm offering these capabilities and age of the active trader. The prior release also conveyed that the type of securities traded online and whether or not there is near-term opportunity for brokerage houses to expand account revenue is also a function of traders’ age.

Recent study findings provide a new understanding of how traders’ age differentiates brand positioning and platform capabilities perceived as “extremely important” for a brokerage firm to provide; importance is based on % top-two ratings on a seven point scale covering calendar quarters 4Q09 thru 4Q12. For example, 44% of active traders under age 50 place high importance on the instant messaging capabilities of a trading firm versus only 27% of older traders who view this technology as critical. Younger traders are also twice as likely (41% vs. 20%) to value a brand offering “online communities for traders to exchange ideas” than are traders age 50+.

“Brokerage firms seeking to grow account assets and commission revenue from online active traders must consider traders’ age when executing their 2013 marketing strategies. Our historical data demonstrate that age differentiates traders placing the highest importance on a brand’s equity and specific trading platform capabilities,” explains John Duggan, Phoenix VP of Sales and Marketing. Specifically, active traders age 50+ ascribe higher importance than do younger traders to market perception that a brokerage:

  •     “Is fair and ethical in its business” (88% vs. 76%)
  •     “Executes trades quickly and accurately” (90% vs. 78%)
  •     “Provides its customers with best in class service” (71% vs. 66%)
  •     “Has fair and simple pricing” (87% vs. 79%)
  •     “Offers good value for the money” (87% vs. 79%).

“Active traders under age 50 are the group to target with offerings that enhance customer value, such as online trading education seminars and workshops, investment planning services, and unique online trading capabilities designed for the active trader,” adds Duggan. From the quarterly Phoenix research it is clear that younger active traders are attracted to a brokerage firm if there is sufficient brand “buzz”, as discussed among the online trading community, meaning it is “a company they are hearing a lot about lately” (36% vs. 19%) or the brand “offers special benefits to investors who trade a lot” (57% vs. 53%).

Further, younger active traders are most enamored by brokerages with the reputation of being a good place to:

  •     “Trade options” (52% vs. 35%)
  •     “Trade on margin” (50% vs. 28%)

and where the brokerage charges “margin trading rates that are lower than what I would expect to pay” (54% vs. 34%) and offers “alternative technical trading strategies and back testing of strategy options” (50% vs. 34%).

The quarterly Phoenix Active Trader study has been conducted since October 2005 and was recently administered to 1,205 traders age 21+ for whom a majority report household investable assets of at least $100K. Study data are representative of active traders residing in the U.S. based on average monthly trading volume, age, employment status, years actively trading securities online, if they trade on margin, and whether they trade options and futures. Also reported are detailed evaluations of investor-targeted Print and TV advertisements and traders’ assessment of the online trading platform and related capabilities of such leading brands such as AB Watley, Ameriprise Financial, BSG Traders (The Wizard), Charles Schwab, E*Trade, Fidelity Investments, Firstrade, Folio Investing, Forex Capital Markets, FX Solutions, Gain Capital, Global Forex Trading, IG Markets, ING Direct/Sharebuilder, Interactive Brokers Group, Interbank FX, Invesco, Lightspeed Trading, Market Club, Merrill Lynch, Morgan Stanley/Smith Barney, Muriel Siebert & Co., optionsXpress, Scottrade, TD Ameritrade, ThinkOrSwim, TradeKing, TradeStation, Wang Investments, Wells Fargo, WellsTrade, Xpresstrade.

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John Duggan
Phoenix Marketing International
508-315-6184
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