The advent of online investing and its implications for local financial service providers

Abstract

This dissertation deals with the way the Internet has affected the financial services industry through the advent of Online Investing. This method of investing provides investors with the possibility of executing their own trades via the Internet. However, it should be pointed out that investors should have a certain degree of financial knowledge to be able to benefit from this facility. The mam objective of this study was to examine the way in which online investing affects stockbroking firms as financial service providers. Research was conducted through personal interviews with the stockbroking firms licensed by the Malta Stock Exchange. Online Investing has mainly affected dealings in foreign investments and local stockbrokers have had clients who invest in overseas markets shifting to the Internet, as it is viewed by many as a faster and cheaper way of conducting trades. Locally the facility to trade local shares does not yet exist however this possibility is perceived to exist in the future. As yet, the impact of online investing on stockbrokers is still minor, as only a few of their clients have started to trade online. However, stockbrokers recognise the need to adapt to change and consider offering an online trading facility, even though the need for a professional opinion and discussion with the stockbroker will retain its' importance.