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The Online Finance 40: Online Brokerages

Profiling: Joe Moglia of TD Ameritrade Holding Corp., Gideon Sasson of Charles Schwab Corp. and Mitchell Caplan of E*Trade Financial Corp.

Joe Moglia


TD Ameritrade Holding Corp.

Last year’s rank: 8

TD Ameritrade Holding Corp. is still in the process of digesting the U.S. retail and securities brokerage business of TD Waterhouse Group, which it acquired in 2005. “In 2007 we’ll continue to focus on completing the integration,” says Joe Moglia, CEO of the Omaha, Nebraska, firm. That said, TD Ameritrade was not without its successes last year. The company reported record revenues and income of $1.8 billion and $483 million, respectively, and its operating margin of 53 percent is among the best in the industry. Moglia, 57, introduced a new flat-rate fee of $9.99 for online equity trades, and the company plans to integrate the merger partners’ Web sites this spring so that clients will have access via a single portal. Despite the integration efforts, the company has not lost sight of its primary goal. “We will deliver on our strategy to serve our three core segments: the active trader, the long-term investor and the independent registered investment adviser,” says Moglia. “The key to the success of this deal will ultimately be what we look like in 2008.”

Gideon Sasson

Executive Vice President and CIO

Charles Schwab Corp.

Last year’s rank: 20

In his first two years as the top technology executive at Charles Schwab Corp., Gideon Sasson kept a laserlike focus on the bottom line. He managed to help decrease the San Francisco–based company’s operational costs, even as the demand for more sophisticated technology increased. Now in his third year in the post, Sasson has a new agenda. “The focus is more on simplification and process,” says the 51-year-old, who formerly ran Schwab’s active-trader business. “We want to be the most productive and innovative solutions provider in the business.” To that end, Sasson is reengineering the company’s Web environment, moving to Microsoft’s .NET platform to achieve greater flexibility. The platform will enable customer-service reps to view a client’s entire relationship with Schwab on one screen, offering staff a so-called single view of the customer, and include personalization capabilities designed to help the company cross-sell products to customers on the Web, depending on their portfolio and demographics.

Mitchell Caplan


E*Trade Financial Corp.

Last year’s rank: 9

For a company that was supposed to be focused on integrating the acquisitions of Harrisdirect from BMO Financial Group and BrownCo from JPMorgan Chase & Co. in late 2005, E*Trade Financial Corp. sure did a lot of growing last year. The company increased revenues to $2.4 billion, up from $1.7 billion in 2005, and it tacked on an additional 700,000 investing and trading accounts, for a total of 4.3 million. Apparently, E*Trade’s message to the market — that it’s not just about trading anymore — is starting to resonate. “The model has evolved, and we have changed who we are going after,” explains Mitchell Caplan, 49, who became CEO in 2003. “We are now offering a variety of products and services, from cash management to lending.” E*Trade also has been working to turn its international business around, having suffered dismal losses as recently as five years ago. Foreign revenues grew 42 percent last year and now make up 8 percent of the firm’s total, up from 5 percent one year earlier. The company has retail offices in nine countries and conducts online business in 15. The key has been creating a seamless operation across borders. “We had a big technology consolidation,” says Caplan. “Now we are on one platform that is multiproduct, multicurrency and multilingual, and that creates massive operational efficiency.”

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