MM Money

Brokerages Battle for 'Active Traders'

Excerpt: During the dot-com boom, online brokerage houses battled for the heart of every investor. Now, they're setting their sights on a narrower, more lucrative target: frequent traders.

During the dot-com boom, online brokerage houses battled for the heart of every investor. Now, they're setting their sights on a narrower, more lucrative target: frequent traders.

The efforts involve a range of actions aimed at these customers: reduced prices on trades, guaranteed speed of execution and specialized customer-service assistance. Yesterday, Harrisdirect, a unit of BMO Financial Group, announced it was cutting its commission to $9.95 from $19.99 for clients making 60 or more trades a quarter or with accounts larger than $500,000. Charles Schwab Corp. is cutting prices for customers who maintain at least a $1 million balance and reducing costs for active traders. Last week, Schwab rolled out a new advertising campaign, its first since 1998 to highlight the lower trading costs. TD Waterhouse Group plans to unveil lower prices for so-called active traders this fall. Meanwhile, firms such as Fidelity Investments and E*Trade Financial Corp. are trumpeting guarantees of faster execution times.

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