Double Identity - online financial supermarkets - Statistical Data Included

Kiplinger's Personal Finance Magazine, June, 2000 by Manuel Schiffres

We also awarded five stars to Merrill Lynch Direct. Its main shortcoming is that customers have no control over their idle cash--it's swept into an insured checking account. But that checking account sports a competitive yield and has government backing.

Others, including Fidelity, Charles Schwab and TD Waterhouse, also performed well in linking banking and brokerage services. We gave Fidelity and Schwab only four stars each because they didn't offer the sleep-tight safety of insured bank accounts.

At the bottom of this category are Dreyfus/Mellon and USABancShares .com. Although you can enter one or the other area from each firm's home page, after that there's practically no connection between banking and brokerage functions. (A USABancShares official said the company would soon unveil a revamped Web site.)

Commissions. The winners: American Express Brokerage and TD Waterhouse. Waterhouse charges a flat $12 for any trade of up to 5,000 shares. For up to 3,000 shares, Amex charges $14.95 for an investor with $10,000 in assets, and nothing (yes, zero, zip, bupkis) for a customer with $100,000 in assets; it also offers free buy trades for customers with $25,000 in assets. The most expensive brokers were Merrill Lynch Direct and Charles Schwab. Both charge $29.95 for routine trades and $59.95 for 2,000-share transactions. WingspanBank.com charges a $10,000-in-assets customer $19.95 for a small trade, while someone with $100,000 pays $14.95.

Mutual funds. None of the fund programs stood head and shoulders above the rest, so none receives five stars in this category. Six firms--DLJdirect, Dreyfus/Mellon, NetBank, Quick & Reilly (a subsidiary of FleetBoston Financial), Charles Schwab and TD Waterhouse--earn four apiece. Dreyfus, NetBank, Quick & Reilly and Waterhouse had notably low charges: $25 or less to purchase $10,000 worth of a no-load fund that's not in a no-transaction-fee (NTF) program. The most expensive charges were Fidelity's $75 and Bank One's $70.

What kept Quick & Reilly from earning five stars in the fund category was the slim pickings among NTF funds it offers--about 600 from 55 families. That compares with more than 1,700 from 267 families at Schwab, 1,400 funds from 237 groups at TD Waterhouse and more than 1,100 funds from 153 families at Fidelity. Fidelity's broad offering helped it overcome high transaction fees and a $75 fee for short-term redemptions.

At the bottom of the heap, Bank One, Citibank and USABancShares receive just one star because they don't offer NTF programs. Bank One makes matters worse with its high fees for buying non-NTF funds.

Research. Two firms, Merrill Lynch Direct and Fidelity, shine the brightest, offering high-quality research to their customers free. Merrill's research, the product of more than 800 analysts in 26 countries and covering some 3,700 stocks, is especially impressive.

Fidelity's research is provided by Lehman Brothers, whose analysts cover more than 1,100 companies. Schwab's research is also top-notch. Customers with $100,000 in assets get Credit Suisse First Boston and Hambrecht & Quist reports free for one year, then pay $29.95 a month. Those with fewer assets pay the $29.95 a month after a free 60-day trial. Because of that, we gave Schwab just four stars.