Brokerage Joins Movement Away From Net Pure-Plays

Spun off in 1997, online broker Suretrade will be folded back into Quick & Reilly

By Maria Trombly

February 12, 2001 12:00 PM ET

Computerworld - In another example of the move away from Internet pure-plays, online brokerage Suretrade Inc. will be folded back into parent company Quick & Reilly Inc. on March 3.

Quick Facts

Suretrade

Lincoln, R.I.

500,000

customers

Quick & Reilly

New York

1.3 million

customers total

430,000

online customers

The two firms are both part of Boston-based FleetBoston Financial Corp., the seventh-largest financial holding company in the U.S.

A "modest number" of the 325 people working at Suretrade's Lincoln, R.I., headquarters will find their jobs eliminated as a result of the return, said Charles Salmans, a spokesman for New York-based Quick & Reilly. For example, he said, there's a lot of duplication in the compliance departments of the two companies.

Following the Trend

The consolidation is part of a trend toward bricks-and-clicks, said Larry Tabb, an analyst at Needham, Mass.-based TowerGroup. Online-only brokerages are becoming increasingly rare, he said.

"There are still players who don't have physical presences," said Tabb. "Some will be relegated to being niche players. The majority of them will either create a physical presence or be acquired."

According to Salmans, Quick & Reilly spun off Suretrade in 1997 after rolling out Web-based trading in 1996.

Lincoln, R.I., was chosen as SureTrade's headquarters because the labor market there is less expensive, Salmans explained.

After last year's downturn in the stock market, however, customers began to demand more individual attention and advice, he said.

"Quick & Reilly was much better suited to be able to deliver that because of the nationwide investor center network that we have," he said.

As a result of the consolidation, Suretrade customers will be able to get advice from Quick & Reilly brokers, and Quick & Reilly customers will be able to use the Suretrade online trading platform, which will retain that brand name.

The pricing structure will also change. Customers currently pay $7.95 to $9.95 for online trades through Suretrade. This fee will increase to match Quick & Reilly's online trading prices of $14.95 to $19.95.

Other online brokerages are making moves toward the physical world as well.

Menlo Park, Calif.-based ETrade Group Inc., for example, will open its first real-world branch in New York in April. The firm also announced plans about two weeks ago to open 20 branches in Target retail stores, which are owned by Minneapolis-based Target Corp.

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