eTrade 2011 Annual Report Download - page 7

Market Making
Our trading and investing segment also includes market making activities which match buyers and sellers of
securities from our retail brokerage business and unrelated third parties. As a market maker, we take positions in
securities and function as a wholesale trader by combining trading lots to match buyers and sellers of securities.
Trading gains and losses result from these activities. Our revenues are influenced by overall trading volumes,
trade mix and the number of stocks for which we act as a market maker and the trading volumes and volatility of
those specific stocks.
Balance Sheet Management
The balance sheet management segment consists of the management of our balance sheet, focusing on asset
allocation and managing credit, liquidity and interest rate risks. The balance sheet management segment manages
loans previously originated or purchased from third parties as well as our customer cash and deposits, which
originate in the trading and investing segment.
For additional statistical information regarding products and customers, see Item 7. Management’s Discussion
and Analysis of Financial Condition and Results of Operations (“MD&A”) beginning on page 29. Three years of
segment financial performance and data can be found in the MD&A beginning on page 46 and in Note 22—
Segment Information of Item 8. Financial Statements and Supplementary Data beginning on page 161.
SALES AND CUSTOMER SERVICE
We believe providing superior sales and customer service is fundamental to our business. Growing our sales
force with a focus on long-term investing is one of the key factors in our growth strategy. We also strive to maintain
a high standard of customer service by staffing the customer support team with appropriately trained personnel who
are equipped to handle customer inquiries in a prompt yet thorough manner. Our customer service representatives
utilize our proprietary web-based platform to provide customers with answers to their inquiries. We also have
specialized customer service programs that are tailored to the needs of each customer group.
We provide sales and customer support through the following channels of our registered broker-dealer and
investment advisory subsidiaries:
•Branches—we have 28 branches located in the U.S. where retail investors can go to service any of their
needs while receiving face to face customer support. Financial consultants are also available on-site to
help customers assess their current asset allocation.
•Online—we have an Online Advisor tool available that provides asset allocation and a range of
investment solutions that can be managed online or through a dedicated investment professional. We also
have an online service center where customers can request services on their accounts and obtain answers
to frequently asked questions. The online service center also provides customers with the ability to send a
secure message to one of our customer service representatives.
•Telephonic—we have a toll free number that connects customers to an automated phone system which
will help ensure that they are directed to the appropriate department where a financial consultant or
licensed customer service representative can assist with their inquiry.
TECHNOLOGY
We believe our focus on being a technological leader in the financial services industry enhances our
competitive position. This focus allows us to deploy a secure, scalable technology and back office platform that
promotes innovative product development and delivery. We continued to increase our investments in these
critical platforms in 2011, helping to drive significant efficiencies as well as enhancing our service and
operational support capabilities. Our technology platform also enabled us to deliver trading and investing
functionality with the introduction of Open API, mobile offerings across new devices and the Equity Edge Online
platform.
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