In the past several years, the popularity and penetration of the Internet has exploded. The Internet has enabled investors to learn more about personal finance and investing. Consequently, they are becoming more sophisticated, and they are evaluating more closely the value they receive when paying for financial services. Although it remains to be seen how significantly the Internet will affect the financial services industry, it is clear that the Internet has changed the traditional financial services landscape. Both access to timely information and execution capabilities are no longer perceived as value-added services.
Investors can find both in abundance on the Internet.
Real-time information about financial markets and investments has become widely available often for free. And because of the efficiencies associated with Internet distribution, the cost to the consumer for securities trades, fixed annuity, and mutual fund products delivered over the Internet is often lower than through traditional distribution channels. These trends have motivated financial intermediaries to provide investors with more value in the form of advice and guidance, including filtering and analyzing the large amounts of financial information available today. On the contrary, the sheer quantity of resources available at an investor s fingertips via the Internet can be a source of confusion. For many investors, making sense of the product and information overload requires the services of a financial intermediary.