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Strategies & Market Trends : The Final Frontier - Online Remote Trading -- Ignore unavailable to you. Want to Upgrade?

To: TFF who wrote (8127)	4/9/2000 9:34:00 PM
From: agent99	Read Replies (2) \| Respond to of 12617

Goldman plans to move on-line with trading site Firm hatches effort to catch up with rivals; debut likely this fall by Stephen Gandel Crains NY 4/10/00 Goldman Sachs Group Inc, which has emerged as the pre-eminent underwriter of Internet companies, has been slow to move its own business into cyberspace. But now it is about to make the leap. The nation?s fifth-largest investment bank will launch an Internet brokerage this fall, according to industry insiders. To draw clients to its on-line product, the Manhattan-based firm is looking to provide many of the services it has traditionally reserved for its institutional clients, such as access to the firm?s analyst reports and companies? conference calls, as well as the staples of financial Web sites, such as real-time quotes and portfolio tracking. Observers believe that Goldman?s Internet venture will initially be focused on allowing its current high-net-worth clientele to trade stocks on-line. Still, a presence on the Net will give Goldman the ability to cheaply reach customers who aren?t able to pony up the $5 million that is Goldman?s minimum for a brokerage account. ?They are not going to say, ?Come on over with your IRA,?? says Dan Burke, who tracks on-line brokerages for Lincoln, Mass.-based research firm Gomez Advisors. ?But Goldman will probably use the Web site to service customers with slightly smaller portfolios than the tens of millions that they manage with their full-service brokers.? Goldman officials declined to comment for this story. The market for higher-end accounts on the Internet is still relatively small. The average account at E*Trade, the second-largest on-line brokerage, is just over $20,000. So, in order to capture a significant portion of the market, Goldman will have to dip into a portion of the financial services market that is very different from the multimillion-dollar accounts that it is used to. ?The financial services market is becoming more segmented,? says Matthew Andresen, chief executive of Island ECN, which electronically matches ?buy? and ?sell? stock orders. ?It will be interesting to see if someone can compete in all of the sandboxes.? Goldman has been quick to make investments in a number of ventures that are trying to facilitate Internet trading. It owns a 15% stake in on-line investment bank Wit SoundView. Goldman has also invested in electronic trading networks Brass Utility and Archipelago, as well as in Syndicate.hub, which will provide information on bond offerings on-line. Only the best But Goldman has lagged the other full-service brokers in moving its trading to the Web. Merrill Lynch and Morgan Stanley Dean Witter both began offering on-line trading to retail customers last year. ?Goldman wants to boast to their customers that they have the best services in every area, and on the Web they just haven?t been competitive,? says Mr. Burke. The full-service brokerages have been cautious in entering cyberspace because of the fear that their low-cost Web services would poach clients from their full-service brokers. But Goldman, like the rest of the full-service brokerages, now has little choice if it wants to retain customers and lure the next generation of high-net-worth investors. ?If a lot of your business is helping technology entrepreneurs create wealth, you are going to have a tough time recruiting those same people as brokerage clients if you are not technologically advanced, which means having on-line capabilities,? says Robert Lee, a financial services analyst at PaineWebber. Staff building Goldman is staffing up in preparation for its e-launch. It recently hired Timothy Foley, who had headed product development at DLJdirect, the Internet brokerage division of Donaldson Lufkin & Jenrette. Sources at Goldman say there is a team of developers at the firm devoted to building the firm?s on-line brokerage, which is set to be finished by this summer. Internally, Goldman employees can already access a mock site, which reads on its front page, ?Our mission: to build the pre-eminent global e-based wealth management business for leading private investors and their customers.??