Barrons 7/2/01: Direct Access Showdown

Discussion in 'Retail Brokers' started by proptrader00, Jul 3, 2001.

  1. I read your last article in the series. Regardless of what you say in the rest of the series, your conclusions highlight your inability to grasp the basic reason your "readers" would be looking at a direct access broker in the first place.

    #21     Jul 19, 2001
  2. Babak


    to apply an analogy, you are criticising a Ferrari for its lack of trunk space

    #22     Jul 19, 2001
  3. "Anyway, I'm amazed at the negative things being said about an article that nobody here has read. If you happen to read the entire series, you'll find hands-on real-life notes about 35 different online brokers.

    I don't make willy-nilly judgments and wild comments about brokers I haven't used myself. I suggest some of you consider withholding your comments about an article series you haven't read. "

    I am sure you must be hurt, you grand work since "War and Peace".
    Get real - you are a "mouth-piece" of Barrons and Barrons
    kisses up to advertisers !!!!! End of story, end of conversation !!! Anyone knows this !! You take youself
    way too seriously.

    Def - you showed real class the way you responded here
    but no matter how nice you are with these guys - they will
    say what the *editor* tells them, "journalistic integrity"
    is like "military intelligence" - an Oxymoron !!!
    #23     Jul 19, 2001
  4. def

    def Sponsor

    i appreciate your comments and tenacity. However, in all fairness, I believe I should state that IB has advertised (albeit small ads) from time to time in Barrons :)
    #24     Jul 19, 2001
  5. Def,
    It should be stated that blaming this article only advertiment may be false. Someone stated it well,
    Barron (and I read it too) may have had an agenda on this.
    It could be for several reasons none is important because
    objectivity and reason was not followed. It's as lope sided
    as Tower of Pisa. I have used a number of brokers and
    professionaly worked for some (Morgan Staney DW, Schwab
    Robbie Stevens) I have had clearing relationships with some
    others. Honestly I can't say why the guy wrote what he did
    but it is wrong, it should be revised !!!! Than again everybody can have "opinions"....hmm

    #25     Jul 19, 2001
  6. Dear Ms. Carey,

    I subscribe to Barron's, derive value from it, and read several of the columns in your series. For me your narrative was illuminating.

    But one underlying question here seems to be this: are Barron's readers really quite as homogeneous as a single ranking seems to assume? My guess is not.

    Therefore, I think a positive step forward in future years would be to draw up separate ranking tables for different interest groups. In other words, do not segment the rankings by what the brokers purport to be (direct access, web-based, etc.) but rather by what users would be looking for. Have separate ranking tables for, say, active traders on one end of the spectrum, buy-and-hold investors on the other, and technofundamental investors in the middle. Then weight the rankings differently. For the active trader table, for example, the key criteria would be those Def already spelled out: execution speed, routing options, and cost. By contrast, most active traders would not find broker-supplied fundamental research to be a value-add. With these narrower criteria, in the active traders ranking table, Interactive Brokers would be at or near the top.

    Respectfully yours,
    A recent discoverer of IB, and here to stay
    #26     Jul 20, 2001
  7. twcarey


    Norske, multiple rankings based on type of trader is a scheme we've been discussing. I also want to make user-defined re-rankings possible on the website.

    I know the readers aren't a monolithic identical bunch, but ongoing research over the years has shown that there's a fairly common set of features a huge majority of Barron's readers want. The research requirement surprised me, but it's been there for years on end now. (Perhaps it's become a tradition....) Research tied to portfolio holdings and to user-defined interests comes up often in focus groups.

    The main problem I have in trying to serve numerous disparate groups is simply space in the book. I get one feature a year and typically my online broker story is one of the longest articles Barron's runs. The March feature took up 10 pages. My monthly columns are usually restricted to a single page, which is about 1,000 words with a little room for some tables and screen shots. There's a lot I would LIKE to do that I just can't do given those restrictions.

    I'm a freelancer and have a choice of publications for which to write. I have a strange background for a writer (not too many of us out there with graduate degrees in econometric modeling for some reason) and over the years have carved out a niche in the financial services field. There are a couple of magazines that have heavily edited my work to favor their advertisers -- and I refuse to take on any more assignments for them. I've had a great relationship with Barron's for over six years now. I keep working for them because they give me a great deal of editorial freedom, and they never pressure me to make nice to advertisers.

    Some of the accusations in this thread are so off the mark regarding my work and my colleagues at Barron's that they crack me up, but I'm aware that there are publications that pander to their advertisers. Barron's is not one of them. It's a publication with a strong voice and a definite sense of its audience, and I understand that the voice can put some people off. Of all the magazines I've written for in the last decade (hmmm, I should do a review of them someday!), and this goes back to the glory days at PC Magazine when Bill Machrone was at the helm, Barron's is my favorite. So far.
    #27     Jul 20, 2001
  8. Dear Ms. Carey,

    Thanks for your elaboration. I'm glad Barron's respects writing as much as you've described, and I understand that despite their unusual support you still face space constraints.

    Since it sounds like you have a lock on the Barron's online broker gig, I look forward to seeing how you resolve these competing objectives and constraints in the years ahead.

    Thanks, incidentally, for mentioning your econometric background. Mine includes that, game theory, and comparative political economy. It's always interesting to find the diversity of pathways by which people have entered this world.

    By the way, don't forget Def's offer. Doesn't a trip to Hong Kong sound fun?

    Best regards,
    #28     Jul 20, 2001
  9. twcarey


    I love Hong Kong -- I've been there a few times and thoroughly enjoyed it. My most recent trip was courtesy of Barron's actually. They dragged me (ever so reluctantly... :) ) on a tour of Asia in March 2000 to talk about the online broker story to groups in Tokyo, Seoul, Hong Kong and Shanghai. I know I learned more than my audiences did on that trip.

    I lived in Tokyo 1997-99 and it was fascinating to be there when discount and online brokerages were legalized in October 1999. My family and I also had numerous opportunities to explore Asia, and took advantage of them. Shortly before we moved back to the U.S., I was extremely popular with the Japanese media for about a month. That was a very strange experience.

    I also had hands-on access to all the brokers I reviewed for a week or two as I was writing each story. I tried to avoid having the dozens of brokers I reviewed give me demos actually -- mainly due to time constraints. Everyone wanted an hour or two with me, and I don't have enough hours in the day to accomodate them all. Maybe next year I'll hole up in some exotic location and ask them all to come to me ... hey, that's starting to sound good. (I need a vacation.)

    Back to the broker story for a minute. I completely revamped the ranking scheme with the 2001 story and will continue to tweak it as time goes on. Right now, the weightings are as follows:

    Trade Execution: 1.25
    Ease of Use: 1.0
    Range of Offerings: 1.0
    Research Amenities: 1.0
    Reports & Customer Access: 1.25
    Costs: 0.5

    We started using weighted scores 3 or 4 years ago when the commission differences from broker to broker collapsed. The additional weight placed on trade execution was actually my doing though -- the practice of payment for order flow ticked me off, and I started penalizing brokers who accepted it. From year to year, the criteria for a 5 point score in each category has shifted slightly. The first year I did the story (1996), the commissions ranged from $12 to $90 for the same transaction. By 1998, the range had shrunk to $8 to $30.

    Anyway, I can see the point of changing the weightings for different types of users; these weighting schemes came out of focus groups and extensive conversations with several hundred Barron's readers. Got a suggestion regarding weightings?

    -- T.

    #29     Jul 21, 2001
  10. Trade Execution: 3.0
    Ease of Use: 0.5
    Range of Offerings: 0.25
    Research Amenities: 0.25
    Reports & Customer Access: 1.0
    Costs: 1.0


    Reliability 2.0
    Stability of Organization 2.0
    #30     Jul 21, 2001