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ETrade Regains Online Trading Spotlight

Quicker, more reliable service boosts online trading old-timer to the top of the pack.

By Lisa Moskowitz, PCWorld   

ETrade Trades Up
The Gomez Scorecard rates ETrade%squots site as faster and more reliable. And according to Debra Chrapaty, senior vice president of ETrade Technologies, ETrade poured a lot of time and money into building a better system for its approximately 450,000 customers. Every morning, ETrade staff attend what Chrapaty calls a %dquotpreflight check%dquot meeting to make sure everything is running smoothly on the site before the markets open.

John Robb of Gomez Advisors also points to the addition of contextual help on the site, which cuts down on service calls, as a reason for the higher ranking. Expanded resources and portfolio alerts boosted ETrade%squots score in the Relationship Services category, while an interactive demo improved its ease-of-use score, he said.

ETrade%squots rates remain $14.95 for listed market trades and $19.95 for NASDAQ trades. Grumbling about these rates, which are higher than average discount-broker rates, is still common in investment discussion groups, especially with super-cheap Lindner.Farsight grabbing the number-one cost ranking with $7 commission fees.

ETrade expects to roll out a new site soon, dubbed Destination ETrade, that the company hopes will retain users for all financial needs, including trading, financial planning, chat, and content. %dquotWe want to be a place where people come and stay,%dquot Chrapaty said. Transaction fees, subscription services, and advertising will all contribute to the bottom line.

DLJdirect Still Number One
For the fourth straight quarter, DLJdirect held on to the number-one position on the Internet Broker Scorecard. This site%squots strong product offering and previous experience on America Online keeps it a few steps ahead of the competition. But the gap is beginning to narrow: This quarter, it was only .03 points ahead of number-two ranked ETrade. While DLJdirect has been able to stay alive with its initial offerings, the rest of the pack will soon catch up, Robb said.

Rounding out the top five sites were Waterhouse Securities, Lindner.Farsight, and Web Street Securities at third, fourth, and fifth, respectively. Brand-name bigshot Schwab dropped to number 20, but remained the number two-rated site in customer confidence.

Industry Grows in Leaps and Bounds
Although online brokers are becoming more sophisticated in their product offerings, the target customer is still the hyperactive trader who wants the best price for executing multiple trades, Robb said. In the next few months, however, he expects a shift toward hooking serious, data-hungry investors. The proliferation of these customers will bridge the gap between the early adopters and less technically savvy investors who are planning life goals, he added.

This quarter%squots score card rated 69 online brokers on more than 130 criteria. The last ranking looked at only 52 sites, and Robb said he expects there will be close to 100 sites to rate next quarter. %dquotThe rate of growth in this industry is absolutely phenomenal. Its almost growing faster than the rate of customers,%dquot he said.