Citicorp is taking aim at some of the biggest names in discount brokerage.
The New York-based banking company recently slashed fees for both electronic and live securities trading to compete more effectively with brands like Charles Schwab & Co. and Fidelity Brokerage Services.
Citicorp Investment Services, the bank's retail brokerage unit, now charges $19.95 for electronic trades with no share or dollar limits, said Kim Sharan, vice president in business design and development.
The brokerage previously charged $38, minus 10% of a transaction's value, for electronic trades, she said.
Meanwhile, trading with a registered representative has also become cheaper, at $29.95, and has moved from a dollar-based charge to a share- based fee, said Ms. Sharan.
Citicorp wanted "to remain competitive within the industry," and to "simplify" the trading process for customers, said Ms. Sharan. She said the company was particularly concerned to keep its electronic fees competitive.
In direct mailings, Citicorp Investment Services challenges investors to compare its rates with those offered by Fidelity and Schwab.
"They're positioning themselves in the discount brokerage arena by picking out the two biggest brand names," said Les Dinkin, a retail financial services consultant and director at Oliver, Wyman & Co.
A recent wave of fee slashing had priced the bank out of the market, he added.
But with its new fee schedule, Citicorp undercuts the discount brokerage leader, San Francisco-based Schwab, which charges a $29.95 fee for electronic trades. The bank still lags Boston-based Fidelity, which charges $14.95 for Internet trades.
Since the on-line trading fee wars began in earnest last October, Schwab has stuck with its $29.95 fee despite price cuts by Fidelity and Quick & Reilly, a subsidiary of Fleet Financial Group. Quick & Reilly cut its on- line trading fee to $14.95 in October, when Fidelity introduced its current rate.
Other banking companies have sought to get involved in the discount brokerage business. Pittsburgh's Mellon Bank Corp. is a player through subsidiary Dreyfus Brokerage Services, which charges $15 a trade. And last week Summit Bancshares, Princeton, N.J., began offering $29.95 trades on the Internet through its brokerage arm, Summit Discount Brokerage.
But Citicorp's move is not prompted by new banking competitors in the discount brokerage arena, said Ms. Sharan. "We've been in the discount brokerage business for years," she said.
Investors can gain access to their Citicorp accounts electronically via the banking company's PC software, Direct Access, and through touch-tone telephones and automated teller machines.
Though Citicorp does not offer Web-based trading, it plans to add that capability within 12 months, said Ms. Sharan.