eTrade 2006 Annual Report Download - page 26

Dispositions
We sold our Consumer Finance Corporation 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 Corporation business originated and serviced recreational vehicles and marine loans. We
retained the loan portfolio; however, we no longer originate or service recreational vehicle or marine loans.
Introduction of E*TRADE Complete
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 initially included 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
We began offering a token-based security solution to our U.S.-based retail customers on a voluntary basis.
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 and is an extremely effective tool for preventing unauthorized access to a customer’s account. 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 the E*TRADE Complete Protection Guarantee
We developed the E*TRADE Complete Protection Guarantee, which was launched in January 2006. Our
promise to customers is that we will cover certain losses that result 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 will not sell personal information to third parties or marketers for any purpose.
Enhanced Pricing Structure
We changed our pricing structure to reward customers for holding assets with us and to align our structure
with the competitive marketplace. The table below shows our pricing as of December 31 for each period:
Customer Segment Base Pricing in 2005 and 2006 Base Pricing in 2004
Active Trader $6.99 to $9.99 per trade $9.99 per trade
Mass Affluent $9.99 per trade $12.99 per trade
Main Street Investor $12.99 per trade $19.99 per trade
We changed our customer segment definitions and lowered our fees charged in February 2005 and
October 2005. In addition to the fee schedule above, we have grandfathered certain trade pricing for customers
acquired through our Harrisdirect and BrownCo acquisitions.
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