Web Street, which went public in November 1999, zoomed from 5,700 customers to 100,000 in two years by offering free trades for Nasdaq orders of at least 1,000 shares. Overall, Jupiter Research projects that roughly one-third of US consumers' investment dollars will be moved online by 2005. Big firms have been racing to catch up. Securities and PaineWebber followed suit. American Express bolted in with a new service that would let certain customers trade for free.
Competition is certain to get even fiercer.
There are now 175 electronic brokers, up from 75 two years ago. This portends a big problem for brokers such as Charles Schwab and TD Waterhouse, which rely on commissions for half their revenue. Sliding Profits When Sanford C. Bernstein last year polled Wall Street executives on whether they would tell their kids to become brokers, none answered an unconditional yes. Some, however, said they would advise their children to grow up to be Internet analysts. Apparently, some are already cashing out themselves.