Ameritrade story

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Ameritrade's success sparks competing effort

TD Waterhouse said Tuesday that it will launch a new online trading program in an effort to win customers away from Omaha-based Ameritrade and other discount brokerage rivals.

Ameritrade, though, also is in the final stages of preparing a new online trading package, spokeswoman Donna Kush said.

"We'll be rolling out a new Web site with new products and features in a few weeks," Kush said.

Waterhouse is losing market share to Ameritrade and St. Louis-based Scottrade, Edmund Clark, chief executive of Waterhouse parent Toronto Dominion Bank, said at an investor conference in Toronto.

"The active trading market is dominated by Ameritrade," Clark said.

Kush said Ameritrade, the biggest online brokerage when measured by daily trading volume, was winning 3.2 clients away from E-trade, Charles Schwab and Waterhouse for every one it lost to them.

The shift of assets by those clients favored Ameritrade by a 2.6-to-1 ratio - $2.60 moved to Ameritrade for every $1 that left Ameritrade for the others, according to July 20 Ameritrade statistics.

Clark said Waterhouse, which is based in New York City, will launch an "active trading platform." Waterhouse features commissions as low as $7 a trade, while Ameritrade charges $10.99.

"It's not just a matter of price," Kush said. "You also have to look at what you get." She referred to Ameritrade's products, services and trade execution.

Clark said Waterhouse is winning clients from full-service brokerages such as Merrill Lynch by targeting people with assets of $200,000 to $300,000.

Ameritrade in recent months has pursued longer-term investors with the intent of getting deeper into their pockets. Ameritrade clients commonly had most of their assets someplace other than Ameritrade.

Kush said Ameritrade is targeting people with assets of $100,000 to $500,000.

Trading volume at Ameritrade and Waterhouse has slumped recently. In the three months ending July 31, Waterhouse volume fell to 87,000 trades a day from 135,000 in the previous three months, a 35 percent drop.

Ameritrade's daily volume fell 32 percent, from 200,000 trades to 135,000, in the same period. It fell to 113,000 in August.