The competition to lure bargain-minded stock traders to the Internet is getting more heated.
This week, Quick & Reilly Inc. launched a television advertising campaign touting its $26.75 fee for the QuickWay Net on-line trading program. The 60-second advertising spot is running on the cable stations MSNBC, an NBC-Microsoft joint venture, and CNBC, NBC's financial news cable station.
The company has long made fee comparisons in its brochures and in print advertising. But television spots are a more aggressive way to target the firm's potential customers.
"It's a focused audience (watching MSNBC and CNBC) and this is a great way to target them," said Peter Quick, president of Quick & Reilly.
At $26.75 per trade, Quick & Reilly's Internet trading program offers a substantial discount from the firm's standard minimum fee of $37.50.
"That makes us very competitive with Schwab and Fidelity," said Mr. Quick, referring to on-line services at rivals Charles Schwab & Co. and Fidelity Investments Group.
The service is cheaper than Schwab's on-line service, e.Schwab, which charges $39 per trade (or $29.95, with a minimum of $5,000 in the account). Fidelity's WebExpress has a minimum fee of $38, though a commonly applied discount can get it down to $28.50.
In recent years, Quick & Reilly has moved aggressively to attract home traders. QuickWay Net provides on-line trading and access to research, news, analysis, portfolio information, and real-time stock quotes.
It's the logical evolution from the firm's QuickWay Plus system, which provided computer-to-computer access, and the Easy Trade 24-hour telephone trading line. "This is a richer mix. You're on the Internet, so you have far more menu choices," said Mr. Quick, whose New York-based firm has 116 brick-and-mortar offices nationwide.
Brokerages have leaped into on-line trading programs as an inexpensive way to attract new customers-and capital. Many have sought out the perceived demographics of Web surfers: youth, education, rising income, and - brokers hope - rising interest in investment.
As many as nine million U.S. households, 8% of the total, will manage brokerage accounts on-line in the next three to five years, according to Jupiter Communications, New York.
At the same time, the Internet trading business may be driven by two extremes of customer demand.
A Palo Alto, Calif., firm, E-Trade Group, can help investors find trades for as little as pennies per share. But the Internet user has to know exactly what he or she wants, without benefit of information about the stocks or mutual funds in question, said David Weisman, director of money and technology strategies at Forrester Research Inc., Cambridge, Mass.
In fact, Mr. Weisman said, Forrester studies of Internet brokerage use show the discounting trend is likely to rebound toward more extensive-and more expensive-services.
"There's a whole sector of people who only make 12 to 20 trades a year who are willing to pay more in commission for more service," said Mr. Weisman.
That group is 25 to 44 years old and has income of $50,000 to $150,000. Typically, those investors need brokerage guidance, he said.
"They don't have the net worth to get noticed by the major brokerage firms and they're underserved by the self-service (Internet trading) model," he said. "There's a bigger market out there for people (Internet brokerages) who provide analytics, news, and research. The market is headed toward a midline."