Profitable E*trade spins-off advisory business
Listed online share trading facility E*Trade has ridden recent outstanding stock market performance to post an $8.83 million profit, and split its advisory support business into a separate subsidiary.
Although profits were up just over 20 per cent for the half year to December 2005, E*Trade chair Kerry Roxburgh conceded this could mostly be attributed to strong market performance.
“Whilst the market outlook is positive, we are well aware the business relies directly upon equity market conditions that are beyond our control,” he said.
Chief executive officer Brett Spork said the listed company, which also offers managed funds and margin lending, could expect to reap the benefits later this year of recent spending on product enhancements.
He said the new advisory support subsidiary, Australian Stockbroking and Advisory Services, would mostly be used by retail stockbrokers in need of support services but not wanting to work for one of the mainstream firms, and could also be used by unlicensed financial planners looking to get a licence.
In September last year, a report by ACNielson found that financial planners were losing a significant portion of their business to online stockbrokers.
The research showed that the use of retail share traders increased by 10 per cent in the six months to September last year, with most of that growth in online trading.
According to the survey, a record 545,000 Australians had traded online by September last year.
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