Online Trading Hasn't Made Traditional Stock Brokers Obsolete
NEW YORK -- The popularity of Internet trading sites would seem to indicate that live human brokers might become a quaint relic of the past, like ticker tape.
But the securities industry's demand for the real thing is growing, a point driven home last week by Morgan Stanley Dean Witter & Co.'s chief financial officer, Robert Scott, who said that his firm hired more than 400 brokers during the second quarter and expects to hire at a similar rate for the rest of the year.
"Layoffs are not in our lexicon. Our retail side is very busy, with people still working long weeks. We expect to continue to be very aggressive in expanding our retail sales force," Scott said.
Other Wall Street firms and headhunters say they are seeing a similar demand for brokers. PaineWebber Group Inc. has more than 7,600 brokers now, and plans to add 1,200 trainees this year. By 2003, the company wants to employ 10,000 brokers. Citigroup Inc.'s Salomon Smith Barney unit, which has about 11,500 brokers, also has plans to add brokers this year, but has not set a definite target. A spokeswoman for Merrill Lynch & Co. said that her firm is also hiring.
According to the National Association of Securities Dealers, the number of registered representatives has been climbing in recent years despite the advent of online trading. In 1999, there were 620,387 brokers registered with the NASD. In the first four months of this year, that number climbed to 638,084.
If online trading is so easy and in demand, why are firms hiring more brokers? …