eTrade 2001 Annual Report Download - page 33

In addition, the securities industry in the U.S. and overseas is subject to extensive regulation. See “Item 7. Risk factors—If changes in
government regulation, including banking and securities rules and regulations, favor our competition or restrict our business practices,
our ability to attract and retain customers and our profitability may suffer” and “Item 7. Risk factors—If we do not maintain the capital
levels required by regulators, we may be fined or forced out of business.”
WEALTH MANAGEMENT AND OTHER
Business Overview
Mutual Funds
In November 1997, we established a Mutual Fund Center which now features nearly 3,000 mutual funds, approximately 1,250 of
which are available without transaction fees or loads. The center also offers several services free of charge, such as a state-of-the-art
proprietary screening tool, and a wide spectrum of research, including risk measures, portfolio information, historical charts and online
prospectuses. Mutual fund orders received by 4:00 p.m. EST result in purchases at the net asset value of the fund as of the day of
order. We have seven mutual funds for which E*TRADE Asset Management, Inc. acts as manager: four domestic stock index funds,
one international stock index fund, an actively managed bond fund and a money market fund. The mutual fund business derives
revenues through management and administrative fees from our proprietary funds, distribution and shareholder servicing arrangements
with third-party funds sold through the mutual fund supermarket including 12b-1 fees, sales commissions paid by third-party load
funds and transactions fees charged to investors on funds without fee-sharing agreements.
E*TRADE Business Solutions Group, Inc. (“BSG”)
BSG was formed by a combination of two acquired companies. The first was the acquisition in the first quarter of fiscal 1998 of
OptionsLink, a division of Hambrecht & Quist LLC, an all-electronic web-based and interactive voice-response inquiry and order
entry system for employee stock option and employee stock purchase plan services for corporate stock plan participants. The second
was the acquisition in July 1998 of ShareData, Inc. (“ShareData”). ShareData was a privately-held supplier of stock plan
knowledge-based software and full service stock plan administration services for private and public companies. The combination of
these two technologies enables BSG to provide a full spectrum of integrated electronic stock plan management
28
Table of Contents
services, including plan administration, compliance, employee communication, and online transaction capabilities. BSG provides
products and services to over 3,000 corporations. Currently, initiatives to increase the scope of the BSG relationships include
cross-selling various E*TRADE Financial products and services such as employee banking services provided by the Bank and ATM
services provided by placing ATMs at company locations where we have existing relationships. BSG distributes its product and
services to corporations through a nationwide direct sales force and third-party partnerships.
Stock Baskets
The Stock Baskets platform allows our brokerage customers to purchase and trade entire portfolios of individual securities simply and
easily in dollar, rather than share, denominations. With a minimum investment of $5,000 for non-retirement accounts and $2,000 for
IRAs, investors can research and build their own personalized basket of individual securities, or they can purchase from among 21
off-the-shelf baskets which have been compiled by professionals at Standards & Poor’ s, a Wall Street research house known for its
independence and objectivity. In addition, investors have the ability to further customize these off-the-shelf baskets to meet specific
investment goals.
2002. EDGAR Online, Inc.