Full-Service or E-Service?

• Author: BECK, BILL
• Position: Brief Article

Why Indiana brokers don't fear Internet trading

If you believe what you read in the newspapers and see on television news, you're liable to think that full-service brokerage firms are as much of a thing of the past as buggy-whip manufacturers.

The nation's business press is full of stories detailing the exciting rise of on-line trading. Companies such as E-Trade and AmeriTrade have catapulted into national prominence with the ease of trading stocks electronically. Discount brokers such as Scottsdale Securities and Charles Schwab advertise a flat fee of $7 or $8 for any trade. Executives of the New York Stock Exchange, the American Stock Exchange and NASDAQ are mulling 24-hour trading so investors can trade on-line day and night.

Late in October, NASDAQ announced that it was creating on-line brokerage links that would allow investors to go directly to their on-line trading accounts. The NASDAQ web site registers a whopping 23 million hits a day, an indication of the growing popularity of on-line trading.

The day of trading stocks through a brokerage house is over, day-traders will tell you. No longer does an investor require the services of a broker to research companies, provide analysis to clients, execute trades and manage portfolios.

Think again. Contrary to public opinion, not everybody out there in the Indiana investment community is wedded to the computer, trading stocks, bonds and pork belly futures over the Internet. A healthy number of Hoosier investors still value the advice, personal service and investment direction that they get from a full-service broker. And Indiana's brokerage firms seem to be doing just fine, thank you, serving investment clients that many have known for generations.

"There's an obvious answer to why people still rely on a full-service broker and some not so obvious answers," says Russell Bauman, senior vice president and branch manager of David A, Noyes & Co. in Indianapolis and a 31-year veteran of the Indiana brokerage business.

"Many people just want the advice of a trained broker," Bauman says. "Some people just want to take advantage of the ideas, fundamental research and trade momentum that we offer." A full-service brokerage house, Noyes is a New York Stock Exchange member and has been in Indianapolis for more than 50 years. With 70 brokers working out of offices in Indianapolis and six cities in Illinois and Wisconsin, Noyes has the expertise to work with a wide variety of investment clients.

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