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Non-Tech : E*Trade (NYSE:ET) -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (2977)	5/31/1998 2:00:00 PM
From: Bikergirl	Read Replies (1) \| Respond to of 13953

That 95% retention rate is done with smoke & mirrors. I am not saying that EGRP in the only one that does this, but a standard way to maintain a high retention rate is that when a client transfers their account out, the brokerage firm, E*Trade in this case, keeps their account "inactive", meaning temporarily closed with no money in the account, but not purged from their computer system. The hope is that the client will come back within a year or so. With the account in this status, EGRP can include this "account" in their total number of accounts, and can count it as a "retained" account. The analysts who follow the brokerage industry know about this little trick, and so they take "retention rate" with a grain of salt. What they really focus on, again, is an escalating growth rate, increasing incoming assets, market share, and # of trades. One of the main problems I have with EGRP, and why I got out of the stock last fall & went short, was that OptionsLink purchase. I did not have a problem with the purchase, per se, but with how they used the purchase to magically add 100,000 "active" accounts to their numbers. This has already been addressed by the analysts, but a "bought" account from OptionsLink is not as valuable or active as a real new account.