eTrade 2006 Annual Report Download - page 24

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• Operating margin is an indicator of the profitability of our operations.
• Compensation and benefits as a percentage of revenue is an indicator of our productivity. In recent
periods, we have grown our revenue faster than our compensation expense. This ratio coupled with
operating margin is an indictor of our increasing efficiency.
Significant Events in 2006
Harrisdirect and BrownCo Customer Conversions
We converted Harrisdirect and BrownCo customers to the E*TRADE Financial platform in the first and
second quarters of 2006, respectively, which was a key step in the integration of our newly acquired customer
base. This allowed us to deliver our functionality and services to these customers while reducing the costs
associated with maintaining the legacy platforms.
Enhancements to the Complete Investment Account
We launched a series of functionality enhancements to the E*TRADE Complete Investment Account
designed to help retail customers optimize their investing and borrowing relationships while evaluating their
portfolio risk, including the Intelligent Lending Optimizer and the Intelligent Investing Optimizer and Risk
Analyzer. We believe these new free tools will help customers better manage their security holdings, cash and
credit products.
Enhanced Distribution Network
We enhanced our distribution network by opening eight new E*TRADE Financial centers in the United
States during the period. With the addition of the centers in Seattle, WA; Farmington, MI; Garden City, NY;
Torrance, CA; King of Prussia, PA; Roseville, CA; Fort Lauderdale, FL; and Scarsdale, NY, we increased the
number of our nationwide financial centers to a total of 24.
E*TRADE Complete Savings Account
We launched the E*TRADE Complete Savings Account, which allows customers to quickly and easily take
advantage of investment opportunities by offering a competitive annual percentage yield, no minimums in
balances or account fees and free transfers to any institution.
Acquired RAA
We completed the purchase of RAA, a Dallas, Texas-based investment advisor managing over $1 billion in
assets, in the third quarter of 2006. We believe this acquisition strengthens our regional advisor business, which
delivers localized wealth management services and advice to retail clients with a minimum of $250,000 in assets.
The growth of our wealth management business extends our ability to provide customers with the complete
support they are demanding to address their varied financial needs.
Launch of New E*TRADE Website
We launched a new and improved website at www.etrade.com. The new site features intuitive navigation,
demonstrations of some of our most popular products and tools, direct access to account opening and customer
service on every page and quick access to our powerful quotes and research functionality.
Development of Automated Trading Strategies Functionality
We developed new conditional orders functionality for retail customers including trailing stops for options
and group orders such as contingent, one-cancels-all, one-triggers-all and one-trigger-one-cancels-other orders.
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