E*Trade Group

THE SCOOP

 

New York-based E*TRADE FINANCIAL was one of the first brokerage houses to go online to make trading directly accessible to individuals.  Today, it's one of the country's top online brokerage houses, with more than 4.5 million accounts worldwide (and about $100 billion in customer assets), most of them individuals who make their trades almost exclusively via the Internet.  Begun as an online platform for stock market investors to make cheap trades during the dot-com boom of the late 1990s, E*TRADE FINANCIAL is now an integrated financial services firm, offering financial products and services for retail and institutional customers ranging from stocks, bonds, options, mutual funds and exchange-traded funds to checking and money market accounts, certificates of deposit, credit cards and mortgages.


Through various acquisitions and by building up its brick-and-mortar presence, the firm is on its way to becoming even bigger.  In 2005, it acquired two online discount brokerage companies, BrownCo (the brokerage offering of J.P. Morgan Invest) and Harrisdirect.  Over the years, the firm has also increased its wealth management operations, acquiring Kobren Insight Management and Howard Capital Management in 2005, and Retirement Advisors of American in 2006.


E*TRADE FINANCIAL has 16 branded web sites worldwide and a geographic presence in 10 countries.  Its subsidiaries include E*TRADE Securities and E*TRADE Bank.  E*TRADE FINANCIAL prides itself on putting power in the hands of retail consumers and institutions through innovative solutions that are better, faster, easier and at a better value than they're likely to find anywhere else.  It developed this value proposition in 1982, when the company got its start out in California under Bill Porter, a pioneer himself who in 2000 launched the International Securities Exchange, the world's first entirely electronic options market.
Founded as Trade Plus, the company served as an electronic service bureau for Wall Street's stockbrokers.  By 1983, Trade Plus processed the world's first online trade, which less than 10 years later (in1992), transformed into E*TRADE Securities and began offering investing services through Netscape.  In 1996, the company launched its soon-to-be famous web site, www.etrade.com, and that same year E*TRADE went public.


By 1999, when the dot-com rush was heating up, E*TRADE FINANCIAL ranked among the biggest e-commerce sites in the world, trailing behind only web behemoths like Amazon, eBay and Priceline.  But among its closest competitors, E*TRADE's praise was even brighter.  Its site was named the online brokerage industry's most user-friendly web site by Gomez Advisors, Lafferty Information and Research Group, PC Magazine and Smart Computing.  At the time, competition was stiff.  By the late 1990s, there were approximately 150 online trading firms.  The dot-com meltdown effectively winnowed down the competitors to such a degree that today only about five original players remain.

 

In 2000, while the rest of the online world struggled to survive, E*TRADE managed to stay afloat despite a sharp downtick in online trading activity.  With extra cash in its pocket, the firm founded E*TRADE Bank also in 2000, with the acquisition of the branchless thrift Telebank. E*TRADE also added E*TRADE Technologies Corp to the mix via its acquisition of Versus Technologies, which helped the firm build an electronic trading platform for its over 1,000 institutional customers around the world.


In 2001, it began opening brick-and-mortar financial centers in New York City, Beverly Hills, San Francisco, Denver and Boston, so investors could interact face to face with its licensed relationship managers and financial advisors, providing personalized service and support for high-net-worth customers.  The centers, according to the firm, "provide a facility where investors can access investing, trading, banking and lending products, and services to help them reach their financial goals."  As of 2009, the firm has 27 E*TRADE FINANCIAL centers across the U.S.

 

E*TRADE also began offering its customers a number of financial services to lure investors, including its E*TRADE Pro trading platform for its most active customers and its E*TRADE Financial Advisor offering, which integrated electronic and personal advice.  In 2001, its mortgage and lending business also grew with the $36 million acquisition of LoansDirect, later renamed E*TRADE Mortgage Corporation, which E*TRADE hoped would help make further inroads into the consumer lending market.
In recent years, E*TRADE FINANCIAL has streamlined its business to focus on its key customer segments, retail and institutional.  From the backend, part of that plan included moving its core processing and clearing system to a single platform in the largest infrastructure project in its history, which it completed in 2004.  From a customer interfacing perspective, the firm launched E*TRADE Complete, its integrated online financial solution that allows customers to optimize their entire financial portfolios by maximizing their use of day-to-day cash and credit while taking into account long-term investments.

 

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E*Trade Group


135 E. 57th St.
New York, NY 10022
Phone: 646-521-4300
Fax: 212-826-2803
www.etrade.com

STATS


  • Employer Type: Subsidiary
  • Stock Symbol: ETFC
  • Stock Exchange: NASDAQ
  • CEO: Steven Freiber
  • 2006 Employees: 4,126

Major Office Locations

  • Menlo Park, CA
  • Sacramento, CA
  • New York, NY

Key Financials

  • 2006 Revenue: $2,420 million

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