New Generation of Online Investment Solutions Challenges Retail Investment Industry

Corporate Insight study examines innovative approaches to retail investment advice and selection

NEW YORK--(BUSINESS WIRE)--Corporate Insight, a research and consulting firm that provides competitive intelligence and user experience research to the nation’s leading financial institutions, today published a study investigating a new generation of online retail investment resources. Corporate Insight’s Advancing Financial Advice study examines 37 startups that provide unique advice offerings and investment solutions that, collectively, pose a potential challenge to traditional retail investing practices. The report analyzes the specific offerings and business models of these VC-backed firms, including the types of products and services they provide, as well as their cost structures.

“The average investor wants financial advice and low-cost, transparent investment solutions. Unfortunately, many traditional investment firms are not structured to meet his or her needs”

“The average investor wants financial advice and low-cost, transparent investment solutions. Unfortunately, many traditional investment firms are not structured to meet his or her needs” said Grant Easterbrook, Analyst at Corporate Insight. “Combine this with ongoing market volatility and a high degree of consumer mistrust and you begin to understand why dozens of startup advice alternatives have emerged in just the past two years. With low cost products, transparency on fees and performance, and user-friendly online platforms, they pose a threat to existing investment industry players.”

Drawing on background interviews with firm executives and Corporate Insight’s proprietary research, the firm identified seven discrete service models ranging from algorithm-based investment recommendations to web-based financial advisor access. Of these seven models, Corporate Insight believes trade-mimicking platforms may have the greatest potential to disrupt the self-directed brokerage industry. This technology, offered by such firms as Covestor and Zulutrade, lets investors track professional money managers or fellow traders by mimicking their trades in real time. With experts to copy, novice investors have an incentive to move out of cash and back into the market. This makes trade mimicking an enticing concept for brokerage firms who rely on commissions for much of their revenue.

Added Easterbrook: “Startups often provide a preview of what could become commonplace in just a few years’ time. By studying these firms now, Corporate Insight hopes to identify the firms and practices that have the most potential to reshape the retail investment industry in the long term.”

For more information about the study or to schedule an interview, please contact Eileen Leonardo at Intermarket: [e-mail]; 212-909-4782

To download the study, click here: info.corporateinsight.com/advancing-financial-advice-study-volume-three

About Corporate Insight

Corporate Insight provides competitive intelligence and user experience research to the nation’s leading financial institutions. For more than two decades, the firm has tracked technological developments in the financial services industry, identifying best practices in online banking and investing, online insurance, mobile finance, active trading platforms, social media and other emerging areas. The firm helps its clients – including 70% of the financial services firms in the Fortune 500 – to remain at the forefront of industry trends and improve their competitive position.

Further information on Corporate Insight is available at www.corporateinsight.com/about-us