investors but says it's not fashioning itself as a discount operation.

Last month the New York-based broker began offering on-line equities trading to customers holding Premier Asset accounts, which require investors to have assets of a least $50,000.

Annual trading fees range from 0.5% to 2% and are based on the amount of assets in the account and the number of trades a customers anticipates making in a year.

PaineWebber also beefed up its client Web site, PaineWebber Edge, to include advanced asset allocation charts. The firm plans in October to add services that would enable managed-account clients to chart portfolio performance, review profiles and market reports from individual money managers, and receive electronic alerts for events such as research ratings changes and option expirations.

The Edge Web site, available to PaineWebber's managed-account clients, was serving 102,500 households as of June 30, representing $89.4 billion in assets, a spokesman said.

Though Internet trading so far has been viewed as the province of discount brokers catering to self-directed investors, observers say full-service brokerage houses must adapt to keep from losing customers.

Over the summer, Merrill Lynch & Co. of New York announced plans this year to launch on-line trading for as little as $29.95 per transaction. Conversely, Charles Schwab & Co. of San Francisco last week announced plans to lower commissions to $29.95 for clients working with investment advisers, putting these fees on a par with those for on-line trades.

But PaineWebber says it has no plans to compete as a discount brokerage. Rather, it says it intends for the Internet to supplement, rather than supplant, its brokers.

"Our primary focus is to allow the affluent investor to have as personal an experience on-line as with an adviser," said Marten S. Hoekstra, executive vice president and director of marketing for PaineWebber's private client group.

The most popular features of the site, he said, are portfolio analysis, data, and research. "The clerical function the ability to key in an order is just one of many conveniences," he said.

The strategy makes sense as firms vie for the attention of a new wave of Internet users, said David F. Toth, a senior consultant at Spectrem Group, a San Francisco-based research firm.

"The next level is looking for advice and a broader array of products," he said. "So value-added services become increasingly important."

Still, the test will be whether PaineWebber can maintain the Web site as a complement to its other services, Mr. Toth said.

"The expectation is that an Internet transaction will be less expensive," he said. The challenge for PaineWebber, he said, will be to position the Web as a new delivery channel, rather than as a cost-cutting device.

But Mr. Hoekstra said PaineWebber is not offering "a channel to distribute investment products," but rather "a channel to distribute relationships with financial advisers." The firm's goal, he added, is to take "what people already seek off-line, and give them the ability to get that experience on-line."

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