E*Trade optimistic on discount broking
E*Trade Chairman Kerry Roxburgh is confident his firm – Australia’s second-biggest online broker behind Commonwealth Securities – is well placed for the future saying it had made great progress towards achieving its vision to become a full-service securities house.
E*Trade released results yesterday which showed that it had increased its cash reserves to more than $10.5 million thanks chiefly to major cost-cutting initiatives over the past financial year and the first four months of this year.
Its alliance with banking group ANZ had also brought its customer base to 82,551- an increase of almost 50 per cent despite a sustained downturn in sharemarket activity.
Chief executive Mike Deleray noted that E*Trade had expanded product offerings and streamlined business operations although Mr Roxburgh admitted that response to E*Trade's self-directed managed funds offering had been “disappointing” and he may have been overly optimistic on the level of demand for them.
The rollout of more than 300 managed funds available on-line was aimed at diversifying E*Trade's business away from the stockmarket, as it faced increased competition, decreased brokerage rates and lower volumes on the ASX.
Financial adviser support for the company's managed funds offerings might be better handled by introducing “loads” or commissions payable to financial planners.
Mr Roxburgh sees a bright future in store for discount broking and tips growth around the world via online components of markets to be 30 per cent.
The Age Online 22/11/2001
The Australian Financial Review Online 22/11/2001