Revamped website aims to trump Schwab’s

In its never-ending battle to attract advisers, TD Waterhouse Group Inc. is launching an Internet site designed to one-up industry leader Charles Schwab Corp. with better features.

New York-based Waterhouse’s move is a direct response to Schwab’s own website overhaul in September that added cheaper online trading and other site improvements.

Waterhouse hopes the strength of its new site, called Veo (“I see” in Latin), will help lure independent advisers, and their clients’ assets, from Schwab.

“It [Veo] leapfrogs the competition and introduces a number of features not available on competitors’ websites,” boasts Peter Mangan, executive vice president at TD Waterhouse Institutional Services, the company’s San Diego-based adviser arm.

Among the new features, advisers can view all of their positions on a consolidated basis, with the ability to control access to the site and limit client trading online.

Unfortunately, Schwab has had a tremendous head start. At yearend 1998, Schwab Institutional had a 71% share of the adviser market, while Waterhouse had a mere 6.3%. (Fidelity was the second-largest in the market with a 18% share).

“Schwab has set the pace in the RIA market and has been the perennial leader on the technology front,” says John Payne, a consultant with Boston research firm Cerulli Associates Inc.

Still, Mr. Payne says Waterhouse is “well-positioned” to increase its market share, mostly because advisers are increasingly working with more than one brokerage firm to clear trades.

brand loyalty slipping

In 1998, roughly 25% of advisers had client assets in the custody of more than one firm, up from only 10% in 1995, says Mr. Payne.

As for innovation, it’s hard to say how much more advanced Waterhouse’s site is than its competitors; Veo will be available to advisers in December.

In response to a description of the services it will offer, a Schwab spokesman says, “It sounds pretty similar to what we do.”

Mr. Mangan says Veo has three websites in one — the adviser site, a site that allows clients to see their accounts and trade online (at an advisers’ discretion) and a marketing site. “We expect that all our advisers will use it,” says Mr. Mangan.

Waterhouse currently works with 2,500 advisers, who manage more than $9 billion of the brokerage’s $113 billion in customer assets, compared to Schwab’s 5,600 investment advisers who represent about $180 billion of Schwab’s $590 billion in customer assets.

sends clients to advisers

Like Schwab Institutional, Waterhouse has a referral program that directs clients to independent investment advisers in their area. Basically, customers meet with a representative in one of TD Waterhouse’s 200 branches nationwide to discuss their financial goals. The branch then refers them to an appropriate adviser.

Waterhouse’s website will also allow advisers to customize their sites to give them quick access to frequently used functions, review billing records, communicate online with TD Waterhouse Institutional Services and obtain real-time stock quotes, free news and research.