Forrester asserts that wealth managers will consolidate customers' investments using nominee accounts, giving investors a combined net-worth view of investments. Stock and fund performance charts will evolve, letting customers analyse and model portfolios and create their own benchmark indices. As well as portfolio analysis, typical investors will be looking for advice investing online. Forresters says that the new wealth managers must be able to offer educational tools to help less-experienced investors and build advice tools helping customers choose investments.

Charlotte Hamilton, an analyst at Forrester's UK Research Centre, commented: 'The UK online stockbroking market has proved tougher than expected. UK online stockbrokers are struggling to make their business models add up, with fewer online customers and higher customer-acquisition costs than anticipated, and few sources of revenue other than volatile trading commissions.....by 2004, nearly all new customers will be from the mainstream - investors who trade less often, have less appetite for risk, invest more of their assets in funds and want more decision support than the early adopters of today.'

She continued: 'Most of today's execution-only online stockbrokers are poorly placed to serve these mainstream investors. The bare-bones trading platforms that firms offer give little reassurance about security, education about investment risk or help with investment decisions. Also, few offer online customers channel choices other than the Web - such as access to branches in the high street.'

In compiling its comprehensive report, called Overhauling UK Online Investing, Forrester spoke to 27 of the 29 firms that offer online stockbroking in the UK, which included banks, online-only brokers and multi-channel stockbrokers.

Ms Hamilton concluded: 'Many of today's undifferentiated, execution-only stockbroking sites won’t survive - becoming extinct or succumbing to industry consolidation. Those that remain will assume one of three roles: compete against private banks and portals in online wealth management; adopt a niche role serving active or high net worth online traders directly; or act as a white-label stockbroking platform, offering their online broking services to other sites.'