eTrade 2010 Annual Report Download - page 8

•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 2010, 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.
COMPETITION
The online financial services market continues to evolve rapidly and we expect it to remain highly
competitive. Our trading and investing segment competes with full commission brokerage firms, discount
brokerage firms, online brokerage firms, Internet banks, traditional “brick & mortar” retail banks and thrifts and
market making firms. Some of these competitors provide Internet trading and banking services, investment
advisor services, touchtone telephone and voice response banking services, electronic bill payment services and a
host of other financial products. Our balance sheet management segment competes with investment banking
firms and other users of market liquidity, in addition to the competitors above, in its quest for the least expensive
source of funding.
The financial services industry has become more concentrated as companies involved in a broad range of
financial services have been acquired, merged or have declared bankruptcy. During the past three years, this
trend accelerated considerably as a significant number of U.S. financial institutions consolidated, were forced to
merge, or received substantial government assistance. We believe we can continue to attract customers by
appealing to retail investors within large established financial institutions by providing them with easy to use and
innovative financial products and services.
We also face competition in attracting and retaining qualified employees. Our ability to compete effectively
in financial services will depend upon our ability to attract new employees and retain and motivate our existing
employees while efficiently managing compensation related costs.
REGULATION
Our business is subject to regulation by U.S. federal and state regulatory and self-regulatory agencies and
securities exchanges and by various non-U.S. governmental agencies or regulatory or self-regulatory bodies,
securities exchanges and central banks, each of which has been charged with the protection of the financial
markets and the protection of the interests of those participating in those markets.
Our regulators, rulemaking agencies and primary securities exchanges in the U.S. include, among others, the
Securities and Exchange Commission (“SEC”), the Financial Industry Regulatory Authority (“FINRA”), the
New York Stock Exchange (“NYSE”), the National Association of Securities Dealers Automated Quotations
(“NASDAQ”), the FDIC, the Federal Reserve, the Municipal Securities Rulemaking Board and the Office of
Thrift Supervision (“OTS”).
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