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Strategies & Market Trends : A.I.M Users Group Bulletin Board

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To: steve in socal who wrote (8028)	7/29/1999 4:20:00 PM
From: JZGalt	Read Replies (1) of 18928

Steve, I think full service brokers are toast. The exception may be full service financial services where credit card, mortgage, banking, investing, insurance are all bundled under one roof and the fees are considerably cheaper. The way they keep expanding is $$'s under management. With the market acting like it has in the last 5 years, obviously that has expanded and the full service brokerage firms tend to generate fees based on assets moved around. Consequently.... In any case, the ultimate might not be the online brokers, as they might get squeezed with ECN's that are coming up. Part of the Disruptive Influences conferences dealt with this question. One soundbite was "Merrill Lynch's cost is 6 cents per share traded. Datek's cost is 6/100 of a cent.". I believe that is accurate, but at least the gist is accurate. What you might see is the off loading of this backroom stuff to more efficient players. Bank of New York is a name bandied around and there are some rumors of Chase Manhattan linking up and forming their own ECN's to compete with Island and others. NITE comes to mind in this area also. I think that owning or using a full service brokerage is silly unless you are getting value for your transactions, but I don't think the picture is all that rosy for the online brokers either as things get squeezed. It might take a while for that to happen however. Quite a bit of the world isn't anywhere near where we are. ---- Dave (some of my best friends are better than analysts) <grin>

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