There are beliefs from A to Z about how Internet trading will affect people. Because there are so many types of people with different interests, perspectives, and most applicable, income levels, there is just simply no way to tell how an individual will trade. I feel that ones age, background, and current economic status are the characteristics which play the most significant role.

    As we are in the midst of a great change, on-line trading companies like E-Trade, Ameritrade, Donaldson Lufkin, Charles Schwab and others are making a killing as on-line volume doubled in the last year to 336.7 million trades a day. You would think this type of statistic might scare the full-service brokers, as it appears that much of the trading population seems to be changing there ways. Come to find out, most are not worried at all. You see, a stock broker sees his most impacting commissions come from his/her very wealthy clients. Most of the time those wealthy clients have been around for years and have established a trust and a confidence in their broker. In fact, on average, those who invest with full-service brokers have about $100,000 in their accounts and are over 50 years old. So generally, many of these investors don't mind paying the higher commission per trade because they have been reaping the benefits for years. It also seems to me that trading over the Internet requires a lot of attention. If someone is trading with short term goals, at least 3 or 4 hours a day would be necessary to see any substantial gains. Finally, many full-service brokers are popular among families. As my interest for the stock market began to grow, the first steps I made were through my father's broker. I believe that factors such as the above will remain intact, forever assuring security in the jobs of the full-service brokers.

    In contrast, a significant growth of on-line players will continue to be seen trading stocks. A survey from Paine Webber saw 8% of their customers have an on-line account a year ago. And another 30% planned to open one within the year. It's not so much that the growing internet brokerage companies are stealing much of the business from the traditional brokerage companies, but simply the stock market itself is experiencing such a world wide growth that more and more investors (especially the young) are exploring new options. By comparison, on-line investors are in their early 30's and have around $40,000 in their accounts. The most noticeable difference is seen in their paid commissions. Though they trade a lot more, this new on-line breed is paying as little as $5 per trade. Merrill Lynch customers are currently paying about $56 a trade which is the lowest premium of full-service firms.

    I work for a brokerage firm called Dain Rauscher where I got a tip from one of the brokers that on-line trading is becoming very popular with women. After researching this, I found that it is not necessarily true. The information I found supported the opposite. I found that 47% of women are completely satisfied with the services provided by Rauscher while only 26% of men seemed to be completely satisfied. I did find a note that women do seem more likely to pay for internet services than men. The trend of investing through Internet firms contains two main groups of people. Younger people who tend to have technically enhanced skills and make a healthy salary for their age are one of the groups which do. Because investing on-line is perceivably more convenient, less expensive, and more readily available to their needs seem to be the main characteristics of the attraction. When I say available to their needs, I mean that most from this group are interested in long-term asset growth, they buy and sell mostly mutual funds, and they do not have much interest in charts and other technical analysis. This group also fits into another class of one-stop shoppers. Along with practicing their investments on-line, they also can perform their credit card, bill payment, and checking functions. The other group is a percentage of serious investors which are highly active and hungry for analyst research. They are also attracted by low cost and quick execution of trades, but they are also drawn to the simple computer interfaces that are offered.