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Morgan unveils online plan
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October 20, 1999: 7:11 p.m. ET
Nation's No. 2 brokerage to debut new service platform on Thursday
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NEW YORK (CNNfn) - Morgan Stanley Dean Witter & Co., the No. 2 brokerage in the United States, will launch its new service platform on Thursday that will combine its online and full service businesses.
Morgan officials made the announcement Wednesday, although the plan had been widely reported earlier in the week.
The new service, dubbed "ichoice," will offer investors their choice of traditional full service, a fee-based Morgan account or a self-directed online account.
Discover Brokerage, which Morgan acquired in 1997, will be renamed "Morgan Stanley Dean Witter Online."
"With ichoice, we will meet the needs of every investor," said Philip Purcell, Morgan's chairman and chief executive officer, during a press conference at the company's New York headquarters.
Under the new system, electronic transactions will cost $29.95 per trade and broker assisted trades will go for $39.95. Existing Discover customers will be allowed to trade at the current $14.95 per-trade fee until March 31.
Morgan clients who want the advice of a financial adviser and online trading capability will have access to an enhanced Morgan Stanley Dean Witter Choice account.
Morgan's strategy is similar to one announced in June by the nation's largest brokerage, Merrill Lynch & Co. (MER). Merrill is slated to launch its online program Dec. 1.
Susan Thomson, a Merrill Lynch spokeswoman, said the company expected others to follow its lead when it announced its plans.
"We have been offering online service to our full service clients since March," she said. "We do not believe that six weeks till the launch of our direct offering matters in the least. This is a relationship business and that's why people come to do business with Merrill Lynch."
Online brokerage services were the topic of a Forrester Research (FORR) study released Tuesday.
The first Forrester PowerRankings listed Charles Schwab Corp. (SCH) as the top brokerage in online trading followed by Merrill. Discover Brokerage Direct and Suretrade were at the bottom of the pack.
"Up until now, Schwab has been setting the pace in online brokerage," Bill Doyle, online financial services research director at Forrester, said in a statement. "Merrill, though, is a bolt from the blue. Eight months ago, Merrill wasn't even in the online trading game. Merrill was held back only by the high cost of its online trading account."
Shares of Morgan Stanley (MWD) closed up 2-9/16 Wednesday at 94-15/16.
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