E*Trade, which once urged investors to "boot your broker," has relented somewhat and will start referring clients with larger accounts to full-service advisers.
The firm could be providing adviser referrals by the end of the first quarter, according to E*Trade Vice President Brian Murray. Likely targets are clients with portfolios worth 250,000 dollars or more.
Why the about-face? "There are a lot of good companies that offer advice, but there is room for improvement," Murray says.
He characterizes the service under development as an "agnostic referral program," meaning E*Trade will not be affiliated with the advisers it refers.
E*Trade has had discussions with several organizations about supplying advisers, but Murray declines to name the entities to which E*Trade is talking.
Murray says the firm will probably offer the names of four or five advisers. Customers will be warned to do their own evaluation of the individuals as well.
More Online Advice Meanwhile, E*Trade and DirectAdvice.com (www.directadvice.com) in January agreed to a deal that will provide DirectAdvice's online financial plans to E*Trade clients.
DirectAdvice offers automated plans and e-mail access to financial planners for 75 dollars a year. The service will likely be free to E*Trade customers.
"We saw DirectAdvice as a nice, user-friendly, nonintimidating site that would complement our services," Murray says. He faults other online financial tools for being too simple.
Murray expects DirectAdvice services to be incorporated into E*Trade's site by the end of the first quarter.
"We want to offer something for the investor with 50,000 dollars," Murray says. "There are not a tremendous amount of services for the 50,000 dollars investor at Merrill."
Separately, in December, E*Trade announced a multimillion-dollar investment in the automated asset allocator Financial Engines. Currently, Financial Engines is serving 401(k) customers at brokerage firms such as Schwab and Merrill Lynch.