Online Trading Leaves Merrill Lynch Behind

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NEW YORK: Congratulate e-broker Charles Schwab for eclipsing Merrill Lynch in market capitalization Monday -- it's part e-stock mania but mostly proof that online trading is here to stay. But the mood at Merrill is considerably gloomier. "Merrill Lynch was built on investing for the ordinary person," says TIME senior economics reporter Bernard Baumohl. "Now a lot of ordinary people are trading online -- and in five years, that will be the conventional way to invest."

By then, Merrill Lynch will have to be a very different company if it doesn't want to be a subsidiary of eSchwab. But it's Merrill's own legions of some 15,000 proudly human brokers who are keeping it out of the online brokerage derby. "It's a big political issue within the company," says Baumohl. "Online trading is a direct threat to their livelihoods." Meanwhile, Mr. and Mrs. America, who can watch CNBC to get the info that Merrill charges for -- and who'll get the key to Wall Street's last sanctum when after-hours trading goes online next month -- are quite happy to get rich all by themselves.