Once merely a resource for cheap stock trading, discount brokerage firms are gaining a foothold in the mutual fund business.

This month DLJdirect Inc., a unit of Donaldson, Lufkin & Jenrette Inc., became the latest discount operation to offer its customers proprietary mutual funds. TD Waterhouse Group Inc., the brokerage arm of TD Bank Financial Group, also plans to beef up its proprietary fund lineup. Others such as Datek Online have considered it but say it is not a top priority.

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