Company Also Broadens Options Service and Pricing
NEW YORK, Feb. 15 /PRNewswire-FirstCall/ -- E*TRADE FINANCIAL Corporation
(NYSE: ET) today announced a refined customer segmentation model for retail
investors that rewards the customer's overall relationship with the Company.
Today's news is tied to E*TRADE FINANCIAL's recent corporate realignment,
which was designed to more directly link the Company's business operations
with its high growth retail and institutional customer segments. The new
segmentation and pricing changes bring increased value to all customers by
creating what the Company believes is the industry's most compelling
combination of value pricing, high-performance product functionality and
broadly accessible service.
"Today's announcement represents the disciplined execution of our 2005
retail customer strategy and is in accordance with the operational and
earnings guidance set forth in December 2004," said R. Jarrett Lilien,
President and Chief Operating Officer, E*TRADE FINANCIAL. "Our 2005 operating
plan more appropriately segments our retail customers and more significantly
rewards customers within these segments. The ongoing refinement of our retail
value proposition is directed at increasing market share in trading volume,
asset deposits and lending balances in 2005."
E*TRADE FINANCIAL has enhanced its customized offerings for each of its
three primary retail customer segments: Active Trader, Serious Investor and
Main Street Investors. In addition, Power E*TRADE customers will be offered
expanded options trading capabilities.
Specific changes to retail customer segmentation, pricing, functionality
and service include:
ACTIVE TRADERS AND OPTIONS TRADERS
-- Lowered segment qualification criteria to just 5 trades per month from
a previous qualification of 9 trades per month(1)
-- Expanded the 2-second execution guarantee to include ETFs
-- Enhanced the dedicated active trader service team with new options
specialists
-- Introduced three new pricing tiers:
New Segment
Criteria/Pricing NOW NOW NOW PREVIOUSLY
Trades Per Month 500+ 50 to 499 5 to 49 9+
Flat Commissions on
Stock and Options Trades $6.99 $7.99 $9.99 $9.99
Per Options Contract Fee $0.75 $1.00 $1.25 $1.25-$1.50
SERIOUS INVESTORS
[Customers with $50,000 or more in assets in combined retail accounts]
-- Reduced commissions on stock and options trades as follows:
New Pricing NOW PREVIOUSLY
Commissions on Stock(2) and Options Trades $11.99 $12.99
MAIN STREET INVESTORS
[Customers with less than $50,000 in assets in combined retail accounts]
-- Reduced commissions on stock and options trades as follows:
New Pricing NOW PREVIOUSLY
Commissions on Stock(3) and Options Trades $14.99 $19.99 + $3.00
order handling
fee
All customer segmentation and pricing changes will be in effect as of
February 18, 2005.
All E*TRADE FINANCIAL customers benefit from an upgraded http://www.etrade.com
-- the point of entry for Active Traders, Serious Investors and Main Street
Investors on the Web, including an enhanced balance details page that now
includes real-time account valuations, the introduction of Stop-Limit orders
with separate and distinct "stop" and "limit" fields and the upgraded
OptionsEdge Center with advanced options chains and educational content.
"Customers have made it clear that the combination of product
functionality, service and price will win the battle for the self-directed
retail investor," said R. Jarrett Lilien, President and Chief Operating
Officer, E*TRADE FINANCIAL. "Customer loyalty will be retained and enhanced
by the company that provides the most complete, customized solutions that meet
the varied needs of Active Traders, Serious Investors and Main Street
Investors."
E*TRADE FINANCIAL offers three trading platforms for active traders and
options traders. Ranked as the #1 trading platform for active traders by
WatchFire Gomez for the last five years in a row(4), Power E*TRADE is the
Company's premium service for its Active Trader segment. Power E*TRADE
includes an advanced combination of trading platforms, execution speed,
dedicated service and low prices. Power E*TRADE Pro is an advanced, no-fee,
direct access trading platform for highly active stock and options traders.
Recent upgrades include integrated options trading capabilities and new
trailing stops and bracketed orders designed for active traders and options
traders who seek a customizable trading platform that is capable of executing
commands at fast speeds. Power E*TRADE MarketTrader is a no-fee, all-in-one,
web-based trading platform for active stock and options traders.
E*TRADE FINANCIAL's investing, optimized cash management and lending
solutions are particularly attractive to its Serious Investor and Main Street
Investor customer segments because the Company has shown its commitment to
advocating for the individual investor in ways other financial services
providers do not, including: the 12b-1 mutual fund fee rebate program, with
nearly $2 million in rebates paid to customers in 2004(5); the lowest cost S&P
500, Russell 2000 and International index fund expense ratios in the
industry(6), and no fee, no minimum IRAs(7).
About E*TRADE FINANCIAL
The E*TRADE FINANCIAL family of companies provide financial services
including trading, investing, banking and lending for retail and institutional
customers. Securities products and services are offered by E*TRADE Securities
LLC (Member NASD/SIPC). Bank and lending products and services are offered by
E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries.
Important Notice
E*TRADE FINANCIAL and the E*TRADE FINANCIAL logo are registered trademarks
or trademarks of E*TRADE FINANCIAL Corporation. The statements contained in
this news release that are forward-looking are based on current expectations
that are subject to a number of uncertainties and risks, and actual results
may differ materially. The uncertainties and risks include, but are not
limited to, changes in market activity, anticipated increases in the rate of
new customer acquisition, the conversion of new visitors to the site to
customers, the activity of customers and assets held at the institution,
seasonality, the development and enhancement of products and services,
competitive pressures (including price competition), system failures, economic
and political conditions, changes in consumer behavior and the introduction of
competing products having technological and/or other advantages. Further
information about these risks and uncertainties can be found in the
information included in the annual reports previously filed by E*TRADE Group,
Inc. or E*TRADE FINANCIAL Corporation with the SEC on Form 10-K (including
information under the caption "Risk Factors") and quarterly reports on Form
10-Q.
Customers should consider the investment objectives, risks, charges and
expenses of a mutual fund carefully before investing. The fund's prospectus
contains this and other important information. For a current prospectus,
please visit E*TRADE's Mutual Fund Center. Read the prospectus carefully
before investing.
(1) To qualify for Power E*TRADE, customers must execute at least 15 stock
or options trades during a calendar quarter. Power E*TRADE qualification will
be determined at the end of each quarter. To continue receiving the Power
E*TRADE commission rates customers must re-qualify by making at least
15 trades by the end of the following calendar quarter.
(2) Qualified Priority E*TRADE customers will be charged $11.99 for all
stock and options trades (plus an additional $1.50 per options contract). For
orders involving securities listed on a national securities exchange (i.e.,
"listed securities") a fee of $0.015 per share will apply to that portion of
the order that exceeds 2,000 shares. To continue receiving Priority E*TRADE
commission rates, customers must re-qualify by maintaining a combined balance
of at least $50,000 in an E*TRADE Securities account or linked E*TRADE
Securities and E*TRADE Bank accounts by the end of the following calendar
quarter.
(3) Standard commissions for stock and options trades are $14.99 (plus an
additional $1.75 per options contract). For orders involving securities listed
on a national securities exchange (i.e., "listed securities") a fee of $0.015
per share will apply to that portion of the order that exceeds 2,000 shares.
All customers will be charged an additional $45 for broker-assisted
trades. An ECN fee of $0.005 per share will be added to all trades executed
during the Extended Hours trading sessions and on trades executed through
Power E*TRADE Pro at an ECN during regular market and Extended Hours sessions.
Customers will be charged one commission for an order that executes in
multiple lots during a single trading day. Orders that execute over more than
one trading day, or orders that are changed, may be subject to an additional
commission.
(4) Power E*TRADE has been ranked number 1 for Hyper-active traders in
Watchfire GomezPro's Scorecard rankings since the third quarter of 1999, and
most recently in Q3 2004, based on low-cost trading, simple interface,
functional capabilities and ease of use of the online offering.
(5) For details and important information about the 12b-1 rebate program,
please visit http://www.etrade.com/fundrebate for a list of participating funds and
specific restrictions such as account eligibility, tax consequences, and
payment schedules. The E*TRADE Index Funds do not charge 12b-1 fees and are
not part of the rebate program.
(6) For important information and details about the lowest-cost E*TRADE
Index Funds, please visit http://www.etradefunds.com. As commissioned by E*TRADE
Asset Management, Inc., Lipper determined that the E*TRADE Index Funds had the
lowest effective expenses as of February 1, 2005, by comparing them to other
Pure Index Funds in the same Lipper Investment Classifications/Objective,
while excluding institutional and other mutual funds requiring minimum
investments of $250,000 or more and exchange-traded funds. The E*TRADE Index
Funds expenses are the lowest because they are contractually limited through
April 30, 2005. There is no assurance that the expense limits will continue
beyond April 30, 2005.
(7) Please visit etrade.com/nofeeIRA for details explaining that E*TRADE
Securities no-fee, no-minimum IRA customers must accept electronic confirms
and statements or have combined assets of $25,000 or more in E*TRADE
Securities and E*TRADE Bank accounts.
E*TRADE FINANCIAL Media Contact
Pam Erickson
E*TRADE FINANCIAL Corporation
617-296-6080
pam.erickson@etrade.com
E*TRADE FINANCIAL Investor Relations Contact
Adam Townsend
E*TRADE FINANCIAL Corporation
703-236-8719
adam.townsend@etrade.com
SOURCE E*TRADE FINANCIAL Corporation
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Related links:
http://www.etrade.com
CONTACT:
press, Pam Erickson, +1-617-296-6080, or
pam.erickson@etrade.com, or investors, Adam Townsend,
+1-703-236-8719, or adam.townsend@etrade.com, both of E*TRADE
FINANCIAL Corporation
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