Unmatched coverage
The Springfield News-Sun digs into important stories that affect jobs and the economy in Clark and Champaign counties, including recent coverage of local unemployment rates and changes to overtime rules.
EF Hutton America has relaunched its website and new products this week, including two annual subscription plans.
The Springfield-based company introduced what it calls a Liberty Plan for a roughly $33 monthly subscription that allows unlimited trading of stocks. The firm also offers a separate Freedom Plan under an annual subscription for about $280.
The firm offers a no-commission model that sets it apart from competitors, CEO Chris Daniels said.
EF Hutton America previously announced a list of products and services in late September, but its website was operational for brief time before coming back down on the day of the announced launch. The site remained down throughout October in order to respond to feedback and improve the site, Daniels said.
>>RELATED: Springfield-based EF Hutton America launches products, website plagued
“We previously did a brief beta launch and got feedback that helped us improve the site and better focus our services,” he said.
The company’s price structure is competitive compared to firms like Fidelity and Charles Schwab, said Alois Pirker, research director for Aite Group’s Wealth Management practice.
However, based on the new website and initial information about EF Hutton America’s products, he noted more information is likely needed before the company can convince consumers to sign on, he said. For example, he said there is little information available about what investment portfolios EF Hutton America offers customers.
“On the trading side the pricing looks competitive,” Pirker said. “But we need to see the trading interface and what’s the universe of things you can trade and so on.”
It’s also not clear customers will trade stocks frequently enough to justify a subscription-based model, Pirker said. There’s also little information about the computer models the company will use for investing, he said.
“They don’t mention any of that here, nor do they mention how they develop the models,” Pirker said. “There’s definitely a little more convincing required before you would sign up clients.”
Firms like Fidelity and Charles Schwab already have an advantage in the crowded market because of a large, established base of customers. That means start-up firms like EF Hutton America need to offer more to get off the ground, Pirker said.
Daniels said he’s confident in EF Hutton America’s products and noted its approach will also allow investors to unify investment and stock accounts with the same company.
“We believe our approach is more customer friendly and avoids some of the conflicts inherent in a commission approach,” Daniels said. “Only time will tell which approach is more appealing to investors.”
The company also provides clients with more flexibility to invest and trade compared to other firms, Daniels said.
“It is true that the financial services industry is competitive,” Daniels said. “There are over 20,000 registered investment advisory firms in the U.S. and over 5,000 broker-dealers. But our approach is different. We (do) not charge a customer based on volume of trades.”
Local leaders in Clark County have been banking on the company to bring new jobs and investment in downtown Springfield. The company has bought two downtown buildings and said it plans to invest $22 million and add up to 400 new jobs in downtown Springfield over the next five years.
On their end, company leaders hope the firm’s historic brand draws customers to their products. EF Hutton America is a new company that was first incorporated in Colorado in 2007.
Start-up firms typically try to stay out of the public eye until their business is fully operating, Pirker said. But he said EF Hutton America is following a more unorthodox model by releasing information a little at a time.
“The business model seems to be becoming clearer, but the devil’s in the details and if the pricing is going to be worth it will depend on what you get for it and they don’t really share much,” Pirker said.
Daniels attributed the company’s approach in part to the challenges of moving its operations to Springfield.
“As for operational issues — bear in mind that at the same time we are conducting business operations we have had to complete a substantial move of our operations,” Daniels said.
About the Author