IT Tech
Full-Service Firms Will Bring More Spice to Web-Trading War Investors who have invested online at discount web sites may drop their current service provider and go to a full service firm. Full service firms such as Merril Lynch, Salomon Smith Barney and Paine Webber have entered into the online web trading war. The only catch is, unlike the discount firms; the full service firms offer professional advice. The full service firms have dropped commission rates and fees for online trading. The prices are still not as low as the discount firms, but worth the price for the available advisors and their expertise. Industry analysts have suggested that a lot of the discount firms will lose a lot of business due to the recent service offerings by the big names. Merril Lynch & Co. led the way this summer by pulling in $16 billion in assets from its online trading. It accumulated those assets in the first three months of its program. A similar fee based program wi
From 1992 to 1995, values of the portfolios of online more than doubled. Lynch offers human advice and unlimited web trading for a flat annual fee. Both have accounts totaling over 3 million. The stronger growth rate for Lynch's new advice/web trading account might be an indication that investors were looking for a full service firm to step up and offer cheaper flat-fee rates. They have been stepping up their own offerings as far as advice and other added services. They also predict that full service brokers share of online assets will grow to 45% by the year 2003. Nevertheless, discount brokers have recognized the trend towards advice and management as well. "The net has empowered people more. This shows that the full service firms still have way to go before putting the discount firms out of business. Forrester also says that the number of accounts at full service firms will increase by more than 4000% within the next four years. 1 web broker in terms of accounts in the third quarter. Also as more and more money gets involved, investors will seek out advice from the pros. Forrester Research n Cambridge Massachusetts has some interesting estimates. They expect accounts to grow to $3 trillion in 2003 from $374 billion this year.
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