Ameritrade charging customers for not trading...LOL
Ameritrade sets maintenance fees for smaller
accounts
NEW YORK, April 3 (Reuters) - Online brokerage Ameritrade Holding
Corp. (NasdaqNM:AMTD - news) on Tuesday introduced new account
maintenance fees, trying to get customers to trade more or put more money into their accounts as stock
markets slump.
Ameritrade, which last week said it would cut 7 percent of its
work force to rein in costs, will charge customers a quarterly
fee for accounts that fail to meet certain criteria.
If an account open for more than six months falls below
$2,000 in total assets or fails to make four processed trades
during the prior six months, the customer will be charged $15
a quarter.
``The new quarterly maintenance fee is necessary to offset the
costs to the company associated with carrying the lower
balance and inactive accounts,'' said Anne Nelson, vice
president of marketing and product development.
``Further, this action is consistent with our objectives of diversifying revenue sources and increasing
assets per account,'' Nelson said.
Retirement and beneficiary accounts are exempt from the charge, which Ameritrade hopes will encourage
customers to place more trades or put more money into their accounts.
Starting on July 1, the Omaha, Neb.-based company will also charge customers a $2 fee for paper trade
confirmations sent by mail. Ameritrade will begin sending financial statements and trade confirmations to
customers by e-mail, which will carry no fee.
``Our electronic delivery is a more efficient choice for our customers and our business,'' said Nelson.
``We are reducing the friction for customers while we further streamline our operations and reduce
unnecessary expenses.''
Ameritrade has cut jobs and revenue projections as stocks keep dropping and investors trade less. Stock
markets have tumbled as the U.S. economy has slowed down and companies have reported disappointing
earnings.
Shares of technology companies, many of which are widely held and were soaring a year ago, have seen
the most carnage. The tech-heavy Nasdaq Composite index (^IXIC - news) is down more than 65 percent
from last April, when it was above the 5,000 mark.
Ameritrade on March 9 said its revenue would be as much as 28 percent lower than earlier forecasts. The
company said it expected fiscal 2001 revenues between $470 million and $600 million, below earlier
estimates of $570 million to $650 million.
Ameritrade in January said it would cut about 9 percent of its staff as it deals with the difficult
environment. Rivals Charles Schwab Corp. (NYSE:SCH - news) and CSFBdirect (NYSE:DIR - news)
recently said they also will reduce staff.
Ameritrade shares closed off 1/2, or 11 percent, at $4 on Nasdaq. They are down more than 80 percent
since hitting a 52-week high of $22-1/8 last April.
Jack McDonnell resigned as Ameritrade president on March 19 because he differed with company
founder Joe Ricketts on how to run the company. Joe's son Pete, a senior vice president, will take over
McDonnell's duties until a permanent replacement is found.
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