Magazine article American Banker

Citicorp Cuts Trade Fees to Compete with Discounters

Magazine article American Banker

Citicorp Cuts Trade Fees to Compete with Discounters

Article excerpt

Citicorp is taking aim at some of the biggest names in discount brokerage.

The New York-based banking company recently slashed fees for both electronic and live securities trading to compete more effectively with brands like Charles Schwab & Co. and Fidelity Brokerage Services.

Citicorp Investment Services, the bank's retail brokerage unit, now charges $19.95 for electronic trades with no share or dollar limits, said Kim Sharan, vice president in business design and development.

The brokerage previously charged $38, minus 10% of a transaction's value, for electronic trades, she said.

Meanwhile, trading with a registered representative has also become cheaper, at $29.95, and has moved from a dollar-based charge to a share- based fee, said Ms. Sharan.

Citicorp wanted "to remain competitive within the industry," and to "simplify" the trading process for customers, said Ms. Sharan. She said the company was particularly concerned to keep its electronic fees competitive.

In direct mailings, Citicorp Investment Services challenges investors to compare its rates with those offered by Fidelity and Schwab.

"They're positioning themselves in the discount brokerage arena by picking out the two biggest brand names," said Les Dinkin, a retail financial services consultant and director at Oliver, Wyman & Co.

A recent wave of fee slashing had priced the bank out of the market, he added.

But with its new fee schedule, Citicorp undercuts the discount brokerage leader, San Francisco-based Schwab, which charges a $29. …

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