E*Trade Upgrades Its Tool Kit

E*Trade and Scottrade introduce helpful new tools.

WE HAVE TAKEN NOTE IN THE PAST OF THE overwhelming amount of data, filters, and tools on E*Trade’s Website (http://www.etrade.com). We have also criticized the site design that makes it all so hard to find. We may have to drop the criticism.

The firm introduced in May its Investor Resource Center, which gathers together tools, articles, calculators and advice about how to find your way (financially) through various life events. “We are acknowledging that customers are expert in some areas, but not everything, so we are helping them with their whole financial life,” says Liat Rorer, vice president of product development.

Then, in early June, E*Trade introduced Online Advisor, a questionnaire and several related tools lassoed under one menu choice, which is found by clicking on Research and Guidance off the broker’s main page. These make it possible for an investor to develop her own action plan. And it is available to customers and non-customers alike at https://us.etrade.com/e/t/cio/landingpage. However, only current customers can take the last step: When you are finished with the tool, you can, with a click, buy the recommended portfolio—if you have an existing E*Trade account.

The questionnaire, which is the heart of the Online Advisor, takes you through a risk-profile assessment (essentially establishing your appetite for risk), then a financial profile, which includes your income, net worth, and liquid assets. After that, you are asked what types of investments you prefer; then an asset-allocation chart is drawn that compares your current assets to the recommended holdings.

Afterward, you are asked, “How would you like to proceed?” You can invest an entire existing E*Trade account to match the recommendation, talk to an advisor, or open a new account and fund it to create the recommended portfolio. E*Trade provides six possible investing solutions for a customer: Build Your Own; Fee-based IRAs [individual retirement accounts] offered via a wealth manager; a session with a financial advisor; or one of three other online options.

The online options are a Select Mutual Fund Portfolio, which is a group of diversified mutual funds, and two exchange-traded-fund (ETF)-based solutions. The Select ETF Portfolio offers up one of seven portfolios that include a variety of ETFs that the investor manages on her own. The other choice is a Managed ETF Portfolio, for the investor who would like to have E*Trade keep an eye on it and rebalance it when necessary. The fee for a Managed Portfolio is 50 to 75 basis points (0.50% to 0.75%), depending on the size of your initial investment (minimum $10,000).

Rorer notes, “We are launching this tool as we are getting big inflows of customers from full-service brokerage firms looking for more guidance and context around their investments. The investors we have had for years also need this.”

If you have an E*Trade account, you can see your allocation graph in your Accounts Summary, and keep track of how you are doing in relation to the recommendation. I found this tool very easy to use and, for an investor who wants some hand-holding or some investing ideas, it is well worth checking out.

Note: Last week it was reported that E*Trade and its largest shareholder, hedge-fund Citadel Investment Group, were working on a plan to shore up its finances owing to problems in its banking unit.

GOING MOBILE: Scottrade has rolled out a mobile-trading application that can be used from any Internet-enabled mobile device; it isn’t necessary to download and install an application. Point your device’s browser to m.scottrade.com, and you will see the log-in screen. We got a demo of the mobile app, which we tested on an iPhone.

Kevin Dodson, director of online financial services, says, “Our new mobile-trading site is designed to make it as easy and seamless as possible for Scottrade customers to transition between their desktops and mobile devices, without sacrificing the research tools they need for the convenience they want.”

Scottrade customers can use the site for free, and view account information—including balances, order status and positions, trade stocks and exchange-traded funds (ETFs) with market, limit, stop, stop-limit and trailing-stop orders. There is also a rudimentary stock screener built in, which links directly to a trading screen that lets you hone in on price, a few fundamentals, and market segment.

Most of the features of the mobile app can be found using push-button bars or drop-down menus. You will have to type in ticker symbols, except for those already in your portfolio. Quotes are displayed in real-time along with a intraday price chart.

Options trading (with market, limit, stop and stop-limit orders) is also possible, but you will have to know the entire ticker symbol in order to place a trade. Getting an options quote is a little clumsy; first look for the stock quote, then select “Options” from the drop-down menu. You can only view one strike price/expiration-date combination at a time, and only simple options orders (single-leg) can be placed.

This mobile application looks like a good start, and it is certainly simple to use. I look forward to the next generation.

MYSPACE FOR TRADERS?
TraderPlanet (http://www.TraderPlanet.com), a social-networking site for active traders and investors that launched this past January, rolled out an upgrade of its Website last week. TraderPlanet.com offers members a suite of market data feeds, technical analysis tools and analyst commentary across asset classes. Members can discuss matters of interest in forums, under the community tab, with topics such as exchange-traded funds, futures, foreign exchange/commodities, options and stocks. You can also discuss approaches to trading; the strategy-trading topic is the most active on the site.

One feature sets TraderPlanet apart: It encourages members to use some of their trading profits to support charities.

TWEEPLE TO FOLLOW: Tim Knight, founder of Prophet.net and ProphetCharts, is a technical-analysis-chart maniac who can be found here: Twitter@ slopeofhope. Tim also has an interesting blog at http://www.slopeofhope.com, which is an entertaining and educational look at the market through the eyes of a day-trading techie. Disclaimer: Tim lives down the street from me, and is a good neighbor.

Posted by on 06/20 at 08:13 AM

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