Last week, when Morgan Stanley Dean Witter reported June-August earnings slightly below expectations, some analysts said it might be partly because of inadequate promotion of its online brokerage unit to retail customers.

Analysts are debating whether Morgan Stanley Dean Witter Online is fulfilling its potential. Some say the cost of taking on the online giants - Charles Schwab & Co., TD Waterhouse, or E-Trade - and the risk of alienating its own brokers are substantial enough that Morgan Stanley has good reasons for not pushing the online service.

At the same time, a slowdown in retail trading volume experienced by at least one other online brokerage in the last quarter also likely affected Morgan Stanley's numbers.

Morgan Stanley faces a sizable obstacle in growing its online business - one encountered by other full-service brokers, such as Merrill Lynch: how to promote an online retail business without alienating their legions of productive and well-paid full-service brokers.

"Full-service brokers are struggling with channel conflicts," said Matt Carrick, an analyst with Gomez Advisors in Lincoln, Mass. "They're trying to keep their customers happy and not offend their own people."

Morgan Stanley also lags behind other brokers in offering online services that investors are increasingly interested in, such as investment advice and tax planning, Mr. Carrick said.

The company does offer premium services online - such as specialty advice and access to initial public offerings - which carry account minimums of $100,000, Mr. Carrick said.

Complicating outside assessments of Morgan Stanley's online brokerage is its refusal to report earnings from the business. A spokesman said that as a matter of policy the company does not break down its online revenues or even report its number of online accounts.

"They're very closed-mouthed about this stuff," said Steven Eisman, an analyst at CIBC World Markets in New York.

There are grounds to think the online brokerage may have been a drag on the bottom line, however, Mr. Eisman said.

He noted that Charles Schwab and National Discount Brokers are much more exposed to potential downturns in retail trading than is Morgan Stanley. Indeed, National Discount Brokers reported a $1.3 million loss, which it partially attributed to a slowdown in trade volume, for the quarter that ended Aug. 31.

Others dispute the assertion that Morgan Stanley's online strategy is troubled. Online business has never been key to the company's success, and it has never shown any interest in building a big discount online brokerage, said Jaime Punishill, senior analyst at Forrester Research in Cambridge, Mass.

The role of the Internet in Morgan Stanley's business is, in many ways, a work in progress, Mr. Punishill said. Through the online unit, the company has gained experience with the Internet and is learning how to serve Internet customers without having to make large capital investments, he added.

That knowledge will serve the company well when online investing becomes more mainstream, Mr. Punishill said. "They're using it for what they want to do with it," he said.

Morgan may also use its online component to attract customers and then pitch its full-service brokerage, Mr. Carrick said.

The online brokerage unit is a legacy of Morgan Stanley's purchase of Dean Witter, which owned Discover brokerage, and purchased the online brokerage Lombard Securities in 1997.

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