No more than 8% of the 109 million total U.S. households will manage brokerage and mutual fund accounts on-line in the next three to five years, according to SRI International's consulting subsidiary.
Given the growth in the use of personal computers and computer-based services, the projection seems modest.
Indeed, at least one other survey, from New York-based Jupiter Communications and Find/SVP, estimates at least 12 million on-line investment households within three years.
However, executives at Menlo Park, Calif.-based SRI said the projection is better news than it appears at first glance.
Since a majority of U.S. households do not hold investment products-such as stocks, bonds or mutual funds-the nine million or so expected to manage investments on-line translates into a customer penetration rate of about 15% after 2000.
In addition, the 8% figure compares favorably to SRI's estimates of consumer use of on-line banking services.
In a report released last month, SRI predicted that no more than 10% of U.S. households will be banking on-line regularly in three to five years.
"With on-line investing, you know there is a much greater focus by the people who have the interest," said Larry Cohen, director of SRI Consulting's consumer financial decisions group. "On-line banking covers a multitude of needs. You are not sure if people want checking, account balances, (or other features)," he said.
SRI executives said people who are both zealous investors and frequent computer users are considered most likely to be "early adopters" of on-line investment products.
But only 2.7 million U.S. households, or 2%, have someone fitting that profile.
About 6.4 million households fit into the category of prospective on- line users-the "followers."
Of these, 3.8 million households have a high level of investment need, but are not comfortable in the on-line environment. The other 2.6 million are technologically literate, but do have much interest or need for investment products, the survey found.
Adam Schoenfeld, an analyst with Jupiter Communications said the SRI estimates are conservative.
"We found that 5.6 million households are already doing some kind of investment activity on-line," he said.
Considering that on-line investment and the public's interest in on-line services is in its infancy, he said it is not unreasonable to expect much faster acceptance than SRI predicts.
Forrester Research has a different take on the state of on-line investing, and its projections for the next few years fall somewhere between those from Jupiter Communications and SRI.
Based on interviews with several top brokerage and mutual fund companies, the Cambridge, Mass.-based research firm placed the number of existing on-line investment accounts at 1.5 million.
It estimated the number of accounts would grow to 2.8 million in 1997 and to 10 million in 2001.
