eTrade 2005 Annual Report Download - page 39

Table of Contents
our Consumer Finance business, exited our institutional proprietary trading business and made a decision to sell our professional
agency business, ultimately executing a sale agreement in February 2006. The Consumer Finance business originated and serviced
recreational vehicles (“RVs”) and marine loans. We retained the loan portfolio; however, we will no longer originate or service RV or
marine loans.
In addition to the above, we made the decision to surrender our rights to trade over-the-counter (“OTC”) stocks on the floor of the
Chicago Stock Exchange (“CHX”) during the first quarter of 2006. We determined that we could provide similar services without a
presence on the floor of the CHX. The listed stock trading business is not impacted by the decision regarding OTC stocks. Additional
information about these dispositions and closures can be found in Note 3 to the Consolidated Financial Statements.
Introduction of E*TRADE Complete
In 2005, we launched E*TRADE Complete, which offers consumers tools to aid in the optimization of investing, cash management and
lending products. E*TRADE Complete tools currently include the Cash Optimizer, the Intelligent Investing Optimizer and the
Intelligent Lending Optimizer. Customers can quickly transfer funds to modify deposit balances to determine the optimal distribution of
cash between accounts based on their personal preferences. Each customer’s product selection and mix will depend on their price,
liquidity, convenience and risk tolerance preference. The Intelligent Investing Optimizer makes it easy to develop an investment
strategy for a customer’s uninvested cash targeted to specific goals, time horizon and risk tolerance. It also suggests allocations for
large cap, small cap, international investment, fixed income and cash. The Intelligent Lending Optimizer is a tool that allows customers
to model multiple lending scenarios to determine whether they can lower their borrowing costs. Customers can use E*TRADE
Complete in conjunction with our other retail products.
Introduction of Token-Based Security
In 2005, we began offering a token-based security solution to our U.S.-based retail customers. Using a token-based security solution
provides an added layer of security at their point of access to the Internet to safeguard their personal financial information. The tokens
produce a six digit code that changes every sixty seconds making unauthorized access almost impossible. We believe comprehensive
security protection is important to financial consumers and our token-based security solution gives us a competitive edge in this area.
Introduction of Complete Protection Guarantee
During 2005, we developed the E*TRADE Complete Protection Guarantee, consisting of these separate programs. This program was
launched in January 2006. Our promise to customers is that we will cover any loss that results from the unauthorized use of our
products and services, subject to certain limitations. Under our Complete Payment Protection Guaranty, we ensure that customer
payments and transfers are processed exactly as the customer desired. In the unlikely event that any customer payment or transfer is
not sent as instructed, we will work with the customer to swiftly resolve the issue and reimburse the customer in full for any late fees,
penalties or related finance charges incurred. In addition under the Complete Privacy Protection Guaranty, we assure our customers
that we will undertake our best efforts to maintain their privacy and we will not sell personal information to third parties or marketers for
any purpose.
Enhanced Our Pricing Structure
During 2005, we changed our pricing structure to reward our customers for holding assets with us and to align our structure with the
competitive marketplace. In conjunction, we changed our customer segment definitions along with our pricing structure in 2005. Our
current segment definitions are as follows:
Active Trader
—In October 2005, a customer with 30 or more trades per quarter qualified as an Active Trader. In February 2005, a
customer that executed 15 or more trades per quarter was an Active Trader. During 2004, a customer that executed 27 trades or more per
quarter was considered to be an Active Trader.
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2006. EDGAR Online, Inc.