Ameritrade Holding Corp. offers online discount brokerage services through five subsidiaries, each of which has its own strategy and target market. Ameritrade Inc. (www.ameritrade.com) is the company's principal retail broker-dealer. It combines discount brokerage fees with trading over the Internet and only charges an $8 brokerage fee for each Internet equity market order. Ameritrade also provides a relatively high level of service and offers a number of investment tools, including free real-time quotes, customizable charts, market summaries, and research tools like company profiles and earnings estimates. It also makes current financial information from Reuters, PR Newswire, and Business Wire available to its customers. Another service of Ameritrade provides free market reports and individual stock alerts that can be delivered via e-mail, alphanumeric pager, and e-mail enabled mobile phone. Ameritrade customers also can request assistance from a customer service representative or technical support person via e-mail or phone.
Another subsidiary, Accutrade Inc. (www. accutrade.com), provides a higher level of service for customers who are willing to pay for it, including personal service from a discount broker. Freetrade.com (www.freetrade.com) was introduced in May 2000 for experienced investors who require little in the way of personalized service. Freetrade charges no commission on Internet market orders and only $5 for stop-and-limit orders and odd lots. Freetrade's limited service includes buying and selling equities, as well as short sells and buys and option orders. However, it does not trade in mutual funds or over-the-counter, pink sheet, or bulletin board orders. All communication with Freetrade must be done by e-mail, and funding of accounts must be done by wire. Freetrade does not accept account transfers, and there are no personnel assigned to open mail or answer the telephone. To qualify for a Freetrade account an investor must have at least two years of experience as a customer of a discount broker and two years of experience as an Internet user. A deposit of $5,000 is required to activate an account at Freetrade. Freetrade expected to generate revenue through interest income, from payments by market makers and specialists based on order flow, and from advertising on its Web site.
Two other subsidiaries, AmeriVest Inc. and Ameritrade Institutional Services Inc. (AIS), enable the company to provide discount online brokerage services to customers of other financial institutions or service providers. AmeriVest provides wholesale brokerage services to financial institutions such as banks, savings and loans, credit unions, and their customers. AIS was introduced in late 2000 to provide brokerage services to financial planners and investment advisors and their customers. Another subsidiary, Advanced Clearing, provides clearing services to Ameritrade Holdings' subsidiaries, as well as to independent broker-dealers and others.
Ameritrade Holding also operates a financial portal, OnMoney.com, which was launched in late 1999. OnMoney.com offers personal financial management services that enable customers to view and manage their various personal financial accounts, including checking and savings accounts, credit cards, reward programs, and investments—all on one statement and without having to transfer any account balances. When Ameritrade Holding acquired Financial Passport Inc. in July 2000, OnMoney.com was able to expand the services it offered to include financial planning and a wide range of other financial products and services. At the OnMoney.com Web site visitors can link to deals on mortgages, discount brokers, banks, auto insurance, life insurance, bill payment services, auto loans, financial planners, and more. The site also features links to up-to-date financial news.
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