Quick & Reilly Unit To Offer
Online Trading For $7.95 Fee
NEW YORK -- Online trading is about to get a little
cheaper.
SURETRADE Inc., a newly formed New York-based
unit of Quick & Reilly Group Inc. (BQR), Monday will
launch an online brokerage operation offering
commissions of $7.95 a trade to buy or sell up to 5,000
shares using the Internet or a touch-tone telephone,
President Don Montanaro told Dow Jones Friday.
The $7.95 rate will apply to all accounts, regardless of
their size and number of trades; to market orders and
limit orders; and to listed and over-the-counter stocks.
SURETRADE will feature many online amenities, such
as up to 100 free real-time stock quotes a day, free
research from a variety of sources and $50 million of
account protection per customer. In addition to stocks,
SURETRADE customers will be able to trade options,
mutual funds and bonds.
"Price is only half the story here," Montanaro said.
"We're also putting useful content in our customers'
hands."
SURETRADE is combining its launch with a print and
broadcast advertising campaign - which will start
Tuesday - created by Wieden & Kennedy, the Portland,
Ore., firm that handles numerous high-profile accounts
including Microsoft Corp., Nike Inc., Miller Brewing,
and ESPN's SportCenter show.
A separate online advertising campaign, created and
placed by CKS SiteSpecific, will begin Monday.
SURETRADE's pricing schedule clearly is designed as a
direct blow against Ameritrade Holding Corp. (AMTD),
which last month decided to offer commissions as low as
$8 for some Internet trades. At the time, AmeriTrade
offered the lowest commissions in the business.
"We expected competition," said Joe Ricketts,
AmeriTrade's chief executive. "I'm a little surprised that it
came so quickly, but I can't say that I'm shocked by
this."
Before the Ameritrade price cut, commissions for online
brokerage services had started at Datek Online's
$9.99-a-trade rate and ran as high as about $30.
Two of the better known online brokers offer prices
within that range. E*Trade Group Inc.'s (EGRP) lowest
commission is $14.95, while DLJ Direct, a unit of
Donaldson, Lufkin & Jenrette Inc. (DLJ), charges about
$20.
In response to Ameritrade's move, Quick & Reilly
adopted commissions of $14.95 for market orders and
$19.95 for limit orders, while and Fidelity Brokerage
Services Inc. cut its commission for "active traders" to
$14.95 from $25, and its rate for other customers to
$19.95 from $28.95.
AmeriTrade's Rickett didn't discount the possibility that
his firm will alter its offerings to respond to possible
competitive pressures from SURETRADE.
"We always take a look at our competition," he said.
"We always evaluate what they're doing. That's just
normal procedure for us."
For SURETRADE, the challenge will be getting noticed
on an increasingly crowded playing field. Piper Jaffray
Inc. analyst Bill Burnham said he sees ad spending for
online trading dramatically increasing over the next year.
"The toughest part I see for them is getting attention in a
roomful of screaming people," he said. "At their prices,
it's going to be essential that they get as much volume as
possible as quickly as possible."
He likened SURETRADE's relationship to parent Quick
& Reilly to Charles Schwab Corp.'s (SCH) rolling out of
its popular e.Schwab online trading service, which
charges about $29.95 per trade.
For SURETRADE President Monanaro's part, he has
seen both sides of Quick & Reilly's online trading efforts.
Last year, he managed the development of QuickWay
Net, the discount brokerage house's Internet securities
trading system, before joining the startup venture. At
SURETRADE, he said he's assembled a team whose
every member has experience in the electronic trading
business.
"We've got the people in place to deliver exactly what
the customer wants," he said. "Simplicity, affordability
and a place where they can trade everything - stocks,
bonds, mutual funds, whatever."
Although he readily admits that he's looking to carve into
the businesses of AmeriTrade and other online
brokerage firms, Montanaro doesn't believe his
company will be competing with QuickWay Net.
By his thinking, QuickWay customers are Quick &
Reilly customers - they still want some of the personal
touches of a full-service brokerage. SURETRADE
customers, however, want to manage their accounts by
themselves.
"We're going after all new customers," Montanaro said.
"The Internet investor is emerging as its own niche. Our
customer is the guy who's doing it all by himself - no
hand holding." |
