What is your opinion on Merrill Lynch being a late entrant in the

online trading services market? Did they do the right thing?

Majorly, late entry of Merrill Lynch proved to be a disadvantage for the firm because:
• The online brokerage space was significantly dominated by DLJdirect as it entered
into the space at the right time.
• Schwab’s online accounts increased from 8.8% in 1995 to a whooping 25% in 1997 as
a percent of total accounts present.
• There was also a significant change in the Schwab’s assets in online accounts, rising
from 12.82% in 1995 to 22.84% in 1997.
• With the increase in internet penetration, the numbers of customers were set to
increase.
• The market was to become more price sensitive because eventually the trading
business was to become a business of volumes.