Online Brokers 2000: Traders Come in All Types

In the world of online investing, the old saw "different strokes for different folks" can be updated to "different houses for different mouses."

Service, price, speed -- all these features mean different things to different investors. Figuring out that perfect mix may be quite the challenge for online brokers, but TheStreet.com's Online Broker Survey revealed some helpful parallels among various investor types and their preferences.

Online Broker Survey 2000 In Today's Package Getting In on IPOs Real-Time Quotes Reliability -- Getting Better Investing Styles Calendar of Stories Message Boards

While Datek finished as the overall top broker in our survey, it wasn't the hands-down favorite of all three investor types that emerged from the more than 10,000 responses we received.

Based on the preferences of buy-and-hold investors, who trade fewer than five times a month and hold a position for more than a year, Fidelity came out on top with a score of 18.89 out of a possible 30. Datek ran a close second, receiving a score of 18.69 based on this group's tastes. Pure buy-and-hold investors accounted for 19% of all respondents.

Investor Type Trading Frequency Time holding trade Buy and hold Fewer than 5 trades a month One year or longer Active investors More than 5 trades a month Six months or less Day trader More than 5 trades a day Less than a day

Datek did top the list based on the likes of active investors, who accounted for 47% of survey respondents. These investors trade five or more times a month and hold a position for less than six months. Datek also satisfied the tastes of daytraders, who made up just 3% of survey respondents.

(The differences among the winners might have been even more pronounced if we had received more ballots from readers who used the smaller firms in vogue with daytraders. These "microbrokers," such as CyBerCorp, MB Trading and A.B. Watley, received the highest scores based on daytrading preferences. They stood out on features such as fast order confirmation, best execution price and real-time quotes. However, we didn't rank those firms because of the small voting pool.)

So where do the investor types part ways? Among buy-and-hold investors, customer service and easy account administration were key.

Type of Investor What matters most after reliability League A/B brokers with highest scores for this feature League A/B brokers with lowest scores for this feature Buy and hold Easy account administration Schwab/Dreyfus Waterhouse/ Suretrade Active investors Real-time quotes Datek/Brown Waterhouse/ Merrill Day traders Fast order confirmation Datek/Dreyfus Waterhouse/ Suretrade League A brokers received more than 650 votes each. League B brokers received between 72 and 312.

"I'm not computer-literate -- all I do is email and trade -- and especially for the older generation, anybody 50 or above, you need a person to talk to," said Virginia Loy, a California stay-at-home mom who has begun trading on the Web in the past 18 months and tends to stick with stocks for a while. She gave her online broker, Ameritrade (AMTD Quote), high marks for customer service, saying the broker is "kind and patient."

For customer service, which was in the top five concerns for all investor types, Fidelity and Schwab (SCH Quote) received the highest marks among the League A brokers, with scores of 22.98 and 22.76, respectively. Ameritrade followed with a score of 17.47. TD Waterhouse (TWE Quote) hugged the bottom with 13.56. Our League A brokers received more than 650 votes each, a robust sample pool. Our League B brokers also received plenty of votes, between 72 and 312, though the results from this pool don't have quite the same heft as League A.

While active investors and daytraders both value customer service, they also ranked real-time quotes and fast order confirmation as top considerations.

Active investors said real-time quotes were most important after reliability. In this area, Datek led the pack with a score of 24.89, far outpacing runner-up Schwab at 21.41.

Datek was tops again for fast order confirmation with a score of 23.16, followed by Fidelity at 22.11. This criterion was the second-most important consideration for daytraders and third on the list for active investors.