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Pastimes : Ask Mohan about the Market

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To: Bonnie Bear who wrote (14096)2/13/1998 5:39:00 PM
From: Tony van Werkhooven   of 18056
 
Bonnie- two more comments about on-line brokers.
1. While there may be a significant development cost, the marginal cost per transaction has to be extremely low. Now factor in the growth of this segment of the industry, and it should be possible to project very strong earnings growth.
2. Once you have established an account with a particular on-line broker and you are reasonably satisfied with execution, it is probably not worth the incremental savings (and hassle) to move the account from one to another. Per transaction pricing affects new customer growth, relatively small impact on the existing base.

Thanks for the JWC reference. I want to look further into it.
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