I remember when Google first came out and asking myself "Do we really need another search engine?". On the surface it didn't seem to distinguish itself other than having a simpler home-page and faster (but not too noticeable on high-speed) results page with more relevant results.

E*Trade is the Google of online banking. It strips out all the garbage fees you pay and just does common-sense fee charging. Never once have I looked at an E*Trade fee and gotten frustrated. When I was at Citi the nickle-n-diming resulted in spending about $50/mo. (including ATM fees) without any trades. That's after-tax money! With E*Trade, the only fee I've paid is a low trading commission. I don't even pay ATM fees (and get refunded for the other bank's charge as well).

You're able to have all your accounts, banking, brokerage, linked accounts with spouses etc., accessible. The support is fantastic as well. I have a personal support number going to a well articulated guy that, although technically just supposed to cover the brokerage side, has helped with every question. Sometimes the competitive advantage is doing the same as the competition, just perfectly!

So, I couldn't disagree more with this article. I have the experience of banking with Citi (sooo expensive and frustrating), Morgan Stanley (stay away), and Schwab (ok, but lacking the banking side) and will stay with E*Trade with no regrets.

Etrade is a great fundamental company.

I have experience with SWAB, BOA and Etrade so far.

Etrade is the best. It has phenaminal user interface. It is very quick to login and maintain your all accounts with one single login.

All accounts, bank, IRA, Investing accounts are linked at one place.

It is also very easy to transfer money from one account to the other including external accounts.

You should experience Etrade to believe it.

Few other benifits:
Global trading -- As for as I know, only Etrade provides this.
ESPP -- Great platform for Employers.

E*trade will previle and here to stay for years to come.

Just open up an account with them and you will understand. I have been with them for some time now and have over 130k in my account. When i learned this could go under I looked at other banks/brokers and guess what there is no one out there like them. I am praying they stay in business so i never have to look for three sites to do what etrade does.

Etrade's competitive advantage is their software, their customer service and the overall quality of what you get. It's not a secret that they offer some of the best trading platforms in the industry, I'm not sure how you missed that.

I would recommend doing a little more research in the future before you start comparing a high quality superior product to inferior companies.

YES. ETFC has a purpose..

May be it may be bought over in some near future cause of it'YES. ETFC has a purpose.

May be it may be bought over in some near future cause of it's lack of leadership and lack of financial vitality. But a firm like ETRADE is needed.

Comparing banks to ETFC is a sin in my view. As if you would compare banks to investment banks. The brokers primarily retail brokers like ETRADE are serving a large pool of folks who are new breed of day traders, casual traders and not a high net worth investors. The size here is the key.

You can compare the segment of trading population to BOP (Bottom of the pyramid).

Now with only two major firms Scotttrade and TDameritrade in the market ETRADE certainly has an opportunity to grow. If the leadership does not focus on it's segment of customers and future needs it's their shame not the business model's.

In my opinion – with out looking @ factual data the following are the growth areas for firm like ETRADES

New market offerings to existing customers
1, Emerging market trading
2. Derivative trading
3. Education in trading and investing
4. Streamlined trading products


New Segments
1. International traders – in emerging markets
2. Move up the value chain help mini hedge funds an alternative brokerage service
3. Explore dark pools etc
4. Financial technology for investment banks
s lack of leadership and lack of financial vitality. But a firm like ETRADE is needed.

Comapring banks to ETFC is a sin in my view. As if you would compare banks to investment banks. The brokers primarily retail brokers like ETRADE are serving a large pool of folks who are new breed of day traders, casual traders and not a high net worth investors. The size here is the key.

You can compare the segement of trading population to BOP (Boottom of the pyramid).

Now with only two major firms scotttrade and TDameritrade in the market ETRADE certainly has an opportunity to grow. If the leadership does not focus on it's segment of custmers and future needs it's their shame not the business model's.

Folks who would ask such a question must not have real experience with E*Trade Financial. I have accounts with Schwab, TD Ameritrade, and many other banks. E*Trade is the finest online financial platform I have experienced and offers the best interbank-interbrokage services I have ever seen.

Yes, I am guilty of being one of the many people who, driven by the fear caused by analysts, pulled money out of E*Trade - but you must ask yourself this: "Why did I leave exactly $100,000 in my E*Trade bank accounts?" The reason is clear. E*Trade is great. Love live a great company! I'll be moving it back, and so will others, mark my word.

For the analysts who are beating down E*Trade, you are self-serving backyard bullies. I don't think any of you actually use E*Trade.

Yours faithfully .....

the user interface alone is competitive advantage. Simple, ease of use and the great online apps make it a cut above the rest

Some good insights and some loyal customers for sure. But a competitive advantage, no, not really. A competitive avantage is scale, balance sheet, management and patents or copyrights.

The first three are currently in question even among those that commented. The last is not. The only thing stoping Schwab or Fidelity or BofA from replicating everything E*Trade has, is the will to do so. They do have the first three advantages.

The real question here is whether one of the many larger players decide they can acquire the funtionality of E*TRADE cheaper than building their own.

I totally agree with the above comments. I've had an Etrade account for almost 10 years. They just make everything easier and don't try to make money off you with a huge basket of fees (Like my former bank, Suntrust). They must have some equivalent of Google's motto "don't do evil." And the service really is top notch--best customer service from a bank, hands down. The reps are always well spoken and give you their first and last names, and have always been very knowledgeable in my experience. One rep really went beyond the requirements of his job when he set up my direct deposit--he did all the legwork with my employer. And their billpay service is totally excellent--very intuitive to use (I think it won some award). They just do everything right--and I for one am thankful and hope they stay around a long time.

Please try it out before you comment on it.

They have a simple, easy to use, clear trading platform, with easy transfer between banking and brokerage accounts.

Not to mention their brand - it's well established and speaks to the younger demo compared to their competitors. They just need better management (overhaul) but that's easy enough - look at Citi.

Mr. Liber,

Can you please provide the name of the broker you use and if possible a comparative analysis of features and costs with those of E*Trade

Cous,
You can do your own analysis. My Wells account has no cost - all my trades are free. I can also move money between my brokerage, checking, savings, equity line and everything else in seconds with ease online.

Question - what bank brokerade accounts do you have that give you free trades??

Sheldon, your comment seems to suggest that you found your own alternative to E*Trade that you personally are comfortable with. Your own personal analysis suggests that there is no reason for E*Trade to exist, since it doesn't convince you to change brokers.

I've been with E*Trade since they opened for business, and they have always been helpful. Ease of use and good service go a long way in the financial world, at least for those of us who happen to have non-financial expertise.

Had to jump in here. I've been trading for over 20 years and currently have had an ETrade account for 5 years, Firstrade for 3 years, and although Wells Fargo has been my bank for over 20 years, I just signed on to their "free" investing when it was offered a couple of months ago.

Wells and Firstrade don't even hold a candle to ETrade. Neither offer ETrade's cost-basis accounting, wide range of research (WF only offers S&P), and great user interfaces for long-term and day traders alike. You can bet that Wells will kill the free trading (like Firstrade did) and go back to their ridiculous fee structures when they feel the need to squeeze customers.

My time is worth money and I'll keep my Etrade account just for the excellent tools, UI, good customer service, and reasonable fees.

Hmm. I'm surprised at all the e-trade fans commenting. I'm a captive e-trade customer since they handle my company's ESPP and stock options. But I also have accounts with Schwab, UBS, and small investment house for brokerage products, then with BofA, Citi, Chase, Wells Fargo, and WAMU for various banking and loan products. And based on my experience with the other companies, I can't see much benefit from e-trade. Personally, I don't like their fee structure, I don't like their user interface, I don't like their service.

Once I complained to an e-trade rep who by phone told me that to transfer securities to another parties e-trade account would take 5-7 days. "But my other broker can do this in a day, and you say you can transfer to an external party in only 3-5 days," I said. "Yeah, well, we're not full service," the guy told me. Plus, they charge me for this, even though other brokerage houses do it for free.

E-trade doesn't generate monthly statements in months when I have no transactions. That's really inconvenient if I want to track my account's historical value.

Their freebies of refunded ATM fees, etc. are common across their competitors too.

They seem to take longer to settle than other companies.

I really don't like anything about them, and I think it's very reasonable to ask what their competitive advantage is. I am skeptical enough to wonder whether the fanboys commenting here in the company's support aren't flacks who have an interest in promoting the company.

Hmm. I'm surprised at all the e-trade fans commenting. I'm a captive e-trade customer since they handle my company's ESPP and stock options. But I also have accounts with Schwab, UBS, and small investment house for brokerage products, then with BofA, Citi, Chase, Wells Fargo, and WAMU for various banking and loan products. And based on my experience with the other companies, I can't see much benefit from e-trade. Personally, I don't like their fee structure, I don't like their user interface, I don't like their service.

Once I complained to an e-trade rep who by phone told me that to transfer securities to another parties e-trade account would take 5-7 days. "But my other broker can do this in a day, and you say you can transfer to an external party in only 3-5 days," I said. "Yeah, well, we're not full service," the guy told me. Plus, they charge me for this, even though other brokerage houses do it for free.

E-trade doesn't generate monthly statements in months when I have no transactions. That's really inconvenient if I want to track my account's historical value.

Their freebies of refunded ATM fees, etc. are common across their competitors too.

They seem to take longer to settle than other companies.

I really don't like anything about them, and I think it's very reasonable to ask what their competitive advantage is. I am skeptical enough to wonder whether the fanboys commenting here in the company's support aren't flacks who have an interest in promoting the company.