Online Brokerages Double Business in 1998

Internet brokers continued to grow at a frenetic pace in 1998 and managed to double their business during the year, according to a new report issued Thursday.

According to Stephen C. Franco, senior research analyst of electronic commerce at Piper Jaffray, online brokers now collectively manage $420 billion in assets. That's due in large part to the fact that the industry's increasing number of competitors added 3.6 million new accounts during the year for a total of 7.3 million. Since many investors have multiple accounts, Franco estimates the total number of online investors to be about 4.4 million.

Of the top 10 online brokers, all reported growth of more than 13 percent, with Waterhouse Securities leading the pack. Waterhouse grew its customer base 59 percent to end at 529,000 accounts. Other strong gainers were Datek, which grew 58 percent to 152,000 subscribers and Schwab, posting a 21 percent increase to end at 2.2 million accounts.

The top 10 brokers and the number of their customers were: Schwab, 2.2 million; Fidelity, 2 million; E*Trade, 676,000; Waterhouse, 529,000; DLJdirect, 529,000; Ameritrade, 354,000; Datek, 152,000; Discover, 112,000; Suretrade, 109,000 and National Discount Brokers, 85,000.