Discount Broker Abandons Branches

Betting that trades made through telephone reps are in danger of extinction in the discount brokerage world, National Discount Brokerage- commanding an estimated 10 percent of the discount electronic trading market-invested $10 million in new technology and is abandoning four branches. The company will focus resources on automated telephone and Internet trading. "We saw in about three and a half years the scale (of electronic trades) go from zero to about 70 percent (of our business)," says NDB managing director John Holman.

The four-year-old firm will consolidate employees in New York with plans to double its 106,000 accounts within two years. "All the electronic brokerage firms were doing very well, where the discount brokers are fighting to stay alive," Holman says. "We said, 'This is the way we have to go.'" FB