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E*Trade Launches Advisory Service

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Posted January 14, 2002 By Beth Cox     Feedback

The product, launched with help from Ernst & Young, creates a financial product that offers financial forecasting tools and lets customers talk with a personal planner.

Continuing to move aggressively to become more than just another online brokerage, E*Trade Group Inc. launched a planning and advice product that includes new financial forecasting tools and the ability to consult directly with personal financial planners through Ernst & Young.

In another step on the road to becoming a full-service financial services company, Menlo Park, Calif.-based E*Trade said its new E*Trade Advisor product "combines personalized electronic and human advice through a blended channel."

"The launch of E*Trade Advisor is an historic moment for our company ...," said Christos M. Cotsakos, chairman of the board and chief executive officer of E*Trade. "As we once revolutionized the online trading and banking industries, E*Trade continues to change the way people plan for their future."

The market has generally been applauding E*Trade's efforts, and the six month chart shows a doubling of the company's stock price, from about $6 to over $12.

Just last week the company's banking subsidiary received approval from regulators to acquire more than 30,000 accounts with deposits currently valued at more than $1.7 billion from Chase Manhattan Bank USA, National Association, a subsidiary of J.P. Morgan Chase & Co.

The new E*Trade Advisor service, which eventually will be made available to all E*Trade customers, addresses financial planning needs and major life events such as retirement and education savings. At launch the product is available only to customers with a combined total of $100,000 in their E*Trade accounts, and only to U.S. citizens.

After aggregating all of a customer's online financial account data, including those with E*Trade as well as with other financial services companies, the service analyzes, forecasts and recommends personalized action plans for long-term investing. Based on a customer's personal information, needs and risk tolerance, E*Trade Advisor is designed to make asset allocation recommendations given an investor's unique goals.

It also lets customers confer with a qualified Ernst & Young personal financial planner. Financial arrangements of that alliance were not disclosed.

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