SOURCE: Bellwether Report

October 04, 2005 15:08 ET

Narrowing the Gap Between Discount and Full Service Brokers

NOTE TO EDITORS: The Following Is an Investment Opinion Being Issued by The Bellwether Report.

TORONTO -- (MARKET WIRE) -- October 4, 2005 -- There are now at least 60 discount brokerage houses out there battling the full service brokerage houses for investors. More and more investors are turning to these discount brokers offering flat rate commissions around $10 and even lower at times, a significant reduction to the sometimes astronomical commissions charged by full service brokers.

These online brokers are getting stronger by the day, Tradestation (NASDAQ: TRAD), a prime example, is a smaller broker but an industry leader. The company increased customer accounts by 14% and client assets by 15%, to over $1.25 billion, in the first quarter of 2005.

Additionally, some of the discount broker monsters have been growing through take-overs. In the past 4 years Ameritrade (NASDAQ: AMTD) alone has acquired 8 brokers, including the most recent acquisition of TD Waterhouse. Since May, take over talks have been really heating up and moving the sector. Shares of companies like Charles Schwab (NYSE: SCH) and E*Trade Financial (NYSE: ET) surely appreciated the gains realized from rumored acquisition talks.

Online trading has exploded over the past year as investors are becoming more self-sufficient and comfortable using their computers for investing.

This is still a relatively young sector with plenty of room for growth. There is likely going to be many more growth opportunities created in this sector as these companies' top lines grow through additional mergers and acquisitions, improved services, and word of mouth all leading to increased client accounts and therefore trade volumes.

Visit the Bellwether Report at to learn about the latest service to hit this sector helping to bridge the gap between discount and full service brokers. The Bellwether Report will be profiling this company as it emerges onto the market in the coming days.

Bellwether Report and its affiliates have not been compensated by the above-mentioned companies.

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